What Are Non-Farm Payrolls (NFP)?

Related subjects:
Reading time: 3 minute(s)
The non-farm payrolls (NFPs) are published in the US on a monthly basis by the US Bureau of Labour Statistics, and are one of the most important macroeconomic reports that come from the world’s largest economy. They are most frequently published on the first Friday of the month at 1:30pm UK local time, and represent the change of employment in the non-farming sector in the US economy.
  • Non-farm payrolls, also referred to as NFPs, represent the change in the total number of paid US workers of any business - excluding the agricultural industry and general government employees.
  • It’s a monthly report generated and reported by the US Bureau of Labour Statistics, and is typically released on the first Friday of the month, for the previous month’s data.
  • It’s seen as an important statistic in gauging the strength of the US economy, which is the largest in the world.
  • NFPs typically encourage high market volatility on certain instruments, as investors seek to take advantage of the rapid price movements and react to the data release.

The non-farm payrolls (NFPs) are published in the US on a monthly basis by the US Bureau of Labour Statistics, and are one of the most important macroeconomic reports that come from the world’s largest economy. They are most frequently published on the first Friday of the month at 1:30pm UK local time, and represent the change of employment in the non-farming sector in the US economy.

The NFPs are a significant report that helps investors to gauge the strength of the US economy and as a result, this data release can bear a strong influence on currency markets, indices and stocks around the world.

How to interpret the NFP data

Depending on the NFP data, financial markets have a habit of reacting quickly and severely, which is why it’s always important for traders to understand the potential market reaction to the data before it’s released.

Better than expected growth in NFPs indicates that the US labour market is strengthening, improving the prospects for the US economy. This then often has a positive effect on the US dollar and US stocks.

Weaker than expected growth in NFPs or even a bad loss of jobs can have the opposite effect, dampening US economy prospects, and see a weakening in the US dollar and US stocks. It can also trigger a rise in the price of Gold, should investors seek the precious metal as a safe haven.

While the number of jobs added per month is the ‘headline’ figure that garners the most attention, the non-farm payroll data is also typically accompanied with other important information, such as:

  • What the unemployment rate is as a percentage of the overall workforce
  • The increase or decrease in jobs across the various employment sectors
  • Average hourly earnings
  • Private sector jobs growth
  • Revisions of previous non-farm payrolls

All these factors combined make the markets highly sensitive to any NFP data released, particularly when the release is vastly different to market consensus. Generally, there is high volatility around any NFP release and traders should normally be wary if they have any open positions on any instruments that could be affected, such as US indices, or major currency pairs involving the dollar and Gold.

Example of the markets reacting to NFP

NFP

Source: xStation

In the example above, we can see how EURUSD reacted to the NFPs in June 2016. The market anticipated a number of 159,000 new jobs created in the non-farming sector in the US economy, while the actual reading brought a negative surprise of a mere 38,000. The worse than expected reading caused the weakening of the US dollar against the euro with the EURUSD market gaining 154 pips in value in a matter of just 30 minutes.

Please remember that even though the markets have reacted to NFP results in a particular way historically, this does not guarantee they will react in the same way in the future. Also, please be aware that the markets can be influenced by a wide variety of factors, with the NFP result being just one such factor.

Xtb logo

Join over 1 000 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
test_cookie cc 25 January 2024
adobe_unique_id cc 1 March 2025
__hssc cc 8 September 2022
SESSID cc 2 March 2024
__cf_bm cc 8 September 2022
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 30 May 2024
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
__hstc cc 7 March 2023
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 7 March 2023

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language