What Is NFP - Blackswan Fx

What Is NFP?

What Are Nonfarm Payrolls?

Nonfarm payrolls is the measure of the number of workers in the U.S. excluding farm workers and workers in a handful of other job classifications. This is measured by the Bureau of Labor Statistics (BLS), which surveys private and government entities throughout the U.S. about their payrolls. The BLS reports the nonfarm payroll numbers to the public on a monthly basis through the closely followed “Employment Situation” report.


In addition to farm workers, nonfarm payrolls data also excludes some government workers, private households, proprietors, and non-profit employees.

Workers in the United States who are not employed in agriculture or a small number of other specialized fields are counted as nonfarm payrolls.

Some government employees, private home employees, business owners, and employees at non-profits are not included in the definition of “nonfarm payrolls,” as are farmers.

The Bureau of Labor Statistics (BLS) compiles information on nonfarm payrolls and includes it in their monthly “Employment Situation” report alongside the unemployment rate.



Understanding NFP

Despite what the term “nonfarm payrolls” would suggest, the BLS does not include employees in a number of other sectors when calculating nonfarm payrolls statistics. Around 80% of U.S. business sectors contributing to GDP are nonfarm, according the BLS (GDP). Even while this includes the vast bulk of the American workforce, there are a few noteworthy exceptions outside the agricultural sector:

– Workers in the government: Although government employees are a major focus of the monthly “Employment Situation” report, some may not qualify.

– Civilians working for the government fall under that umbrella. However, this does not apply to members of the armed forces or government appointees.

– The same goes for CIA, NSA, NIMA, and DIA personnel.

– Personal residences: There won’t be any inclusions for private household employees or domestic home workers.

– When we talk about “proprietors,” we’re usually referring to individuals rather than formal corporations. Self-employed people and those who run businesses as sole proprietorships fall under this category (e.g., without limited liability corporation or partnership status).

– Volunteers and staff: The nonprofit sector is significant but is excluded from analysis in nonfarm payroll data.


Analyzing the Monthly Report

The BLS publishes the “Employment Situation” report on the first Friday of every month after data reporting has concluded. The Bureau of Labor Statistics regularly releases a report titled “Employment Situation” every morning about 8:30.

The Household Survey and the Establishment Survey are the two primary data sources for the monthly “Employment Situation” report. This process merges two reports into one complete monthly report. In addition to reporting on unemployment rates, the Household Survey also includes information on the demographics of the labor force. The headline number of new nonfarm payroll jobs within the national economy is provided by the Establishment Survey section of the BLS’s “Employment Situation” report, generally known as the nonfarm payrolls report.


Household Survey

Elements fundamental to the Household Survey include:

– Indicator of the Jobless Rate
– Compare the unemployment rates for different demographics, including: gender, – Race, education level, and age
– Causes of unemployment
– Employment Statistics Broken Down Into Nontraditional Fields
– Rate of Participation


Establishment Survey

The nonfarm payrolls report is included under the Establishment Survey section of the Employment Situation report. Essential parts of the Business Profile are as follows:

– Total new nonfarm payroll positions created by all reporting organizations during the month
– Job gains outside of farming, broken down by sector (durables, non-durables, services, and government)
– Particulars on time spent at job
– Specifics about the Standard Hourly Wage

Economic Analysis

The highlights of the “Employment Situation” report are the nonfarm payrolls figure and the unemployment rate, but economists and policymakers utilize all available data to analyze the economy and predict future economic activity. The labor force insights in the study affect the economy, stock market, U.S. currency, Treasuries, and gold prices.


Economists utilize Household Survey data to study unemployment, participation, and other demographic changes. Sector-segregated Establishment Survey/nonfarm payrolls data is useful. Many researchers use sector-specific nonfarm payroll statistics. Stock analysts report on sectors and earnings using this breakdown.


Nonfarm payroll data shows sector growth and contraction. Expanding industries add more payrolls, whereas shrinking sectors reduce employment availability.


Economists also value Establishment Survey wage growth. May normally has the most salary increase, with 129,000 new positions. August averages 69,000 jobs. 3.85 million nonfarm jobs were created in 1994, a record. 2009 was the worst year for nonfarm payrolls, losing 5.05 million jobs. 2018 payroll job increase was 2.6 million, up from 2.2 million in 2017 and 2.2 million in 2016.


Need more help?

We’re always happy to talk. Use the bottom right corner of this page to contact our live chat team, or click the button below to send us an email!


Sign up for Competitions!

Your chance to win a free 100k funded account, drop your email!