Employment Data and Non-Farm Payrolls
The US jobs report includes non farm payrolls, unemployment and wage growth. Learn what each number means, release timing, revisions and how markets react.
The US Employment Situation report, known as the jobs report, is one of the most important economic releases in the world. Published by the Bureau of Labor Statistics on the first Friday of most months, it shows how many jobs the economy added (non farm payrolls), the unemployment rate and wage growth. Because jobs drive consumer spending and influence Federal Reserve policy, the report can move stocks, bonds, currencies and gold sharply within seconds of its 8:30 a.m. Eastern release.
What is in the report#
The report comes from two separate surveys:
| Survey | Measures | Sample |
|---|---|---|
| Establishment survey | Non farm payrolls, average hourly earnings, average weekly hours | About 120,000 businesses and government agencies |
| Household survey | Unemployment rate, labour force participation | About 60,000 households |
The two surveys can give different signals in a given month.
Key numbers#
| Number | Meaning |
|---|---|
| Non farm payrolls (NFP) | Change in the number of jobs, excluding farm workers, private household employees and some others |
| Unemployment rate | Share of the labour force without a job and actively looking |
| Average hourly earnings | Wage growth, an input to inflation. See Inflation |
| Labour force participation rate | Share of the working age population in the labour force |
| Revisions | Changes to the prior two months' payroll figures |
| U 6 | A broader measure including discouraged and part time workers |
How to read a surprise#
Revisions and benchmark changes#
Payroll numbers are revised in each of the next two monthly reports as more surveys come in, and an annual benchmark revision adjusts the level using more complete tax records. Revisions can be large, especially at turning points. In 2024, the preliminary benchmark revision indicated job growth over the prior year had been overstated by more than 800,000. Traders look at the trend over several months rather than one number.
The unemployment rate and recessions#
Rising unemployment is a classic recession signal. The Sahm rule, devised by economist Claudia Sahm, signals the start of a recession when the three month average unemployment rate rises 0.5 percentage points above its low over the previous 12 months. It has accurately identified past US recessions in real time, though it has also given borderline signals. See Recession Indicators.
Why the Fed cares#
The Federal Reserve has a dual mandate: maximum employment and stable prices. Strong job growth and fast wage gains can signal inflation pressure; weak jobs data can push the Fed toward rate cuts. See The Federal Reserve and the FOMC.
Other labour data#
| Release | Timing | Notes |
|---|---|---|
| Weekly initial jobless claims | Thursdays | Timely gauge of layoffs |
| JOLTS (job openings) | Monthly, with a lag | Openings, hires, quits |
| ADP employment report | Two days before NFP | Private payroll estimate; imperfect predictor of NFP |
| Challenger job cuts | Monthly | Announced layoffs |
Trading the jobs report#
- Know the consensus for payrolls, unemployment and wages.
- Expect wide spreads and slippage at 8:30 a.m. See Slippage.
- Look at all three key numbers and revisions, not just the headline.
- Consider waiting for the initial spike to settle. See Trading Economic Releases.
Frequently asked questions#
What is non farm payrolls?#
The monthly change in the number of US jobs, excluding farm workers and a few other categories, reported in the jobs report.
When is the jobs report released?#
Usually on the first Friday of the month at 8:30 a.m. Eastern, covering the previous month.
Why does the jobs report move markets?#
Because employment and wages shape consumer spending and Federal Reserve decisions on interest rates.
Next, learn a key survey of business activity in PMI.
Sources#
- US Bureau of Labor Statistics, Employment Situation
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