NFP is part of a monthly report representing how many people are employed in the US, in manufacturing, construction, and goods companies.
It is an important economic indicator related to employment in the U.S.
What is NFP?
NFP stands for Non-Farm Payrolls, which is actually part of the Employment Situation report, released by the Bureau of Labor Statistics, an agency for the U.S. Department of Labor (DOL).
The NFP is a part of the monthly Employment Situation Report that estimates the number of jobs gained (excluding farm workers) in the U.S. in the previous month.
The Employment Situation Report also includes the Labor Force Participation Rate, the Unemployment Rate, Average Hourly Earnings, and Average Workweek Hours, among many other statistics.
The Bureau of Labor Statistics measures labor market activity, working conditions, price changes, and productivity in the U.S. economy to support public and private decision making.
The NFP component usually gets the most attention because it measures the actual number of paid employees (full and part-time) in business and government establishments.
NFP gets its name from the jobs that aren’t included: farmworkers, and those employed in private households or non-profit organizations.
The data is usually delivered on the first Friday of any given month and can create high volatility in the financial markets.
Lots of analysts release their forecasts for NFP figures in advance of the actual release.
This causes a great deal of speculation prior to each report.
What is non-farm employment change?
Non-farm employment change is another term for non-farm payrolls.
Because the NFP figure displays how many jobs have been added or lost in the sectors covered by the report, it is sometimes known as non-farm employment change instead of NFP.
Why is NFP important?
The report provides fresh insight into the overall health of the U.S. economy and how the labor market is doing.
If the labor market is growing, that means more people are making money, and the more spending there will be.
More spending results in a higher Gross Domestic Product (GDP) which is the broadest measure of the economy.
Employment figures can also have an impact on interest rates.
Higher employment usually leads to higher interest rates because of central banks’ monetary policies aimed at balancing inflation with growth.
Interest rates are a significant factor for forex traders.
Learn more: Why Interest Rates Matter to Forex Traders
How to Read the NFP?
The NFP measures the number of jobs created or lost in the U.S. economy over the prior month.
For example, -1000K means 100,000 jobs were lost in all non-agricultural businesses.
To get a feel for the employment situation, it’s good to review the history of previous NFP releases.
Observe the long-term trend in the NFP figures and see if it’s in an uptrend or downtrend.
Keep track of the ranges and see if the recent reports were near historic highs or lows.
Where to find it?
On BabyPips.com’s economic calendar, you can find its event listing.
What time is NFP released?
NFP is released on the first Friday of every month, at 8.30 am ET.