Nonfarm Payrolls (NFP) is an economic indicator that reflects the number of new jobs created in the non-agricultural sectors of the U.S. economy each month. It is a very important macroeconomic indicator of the country, which most fully reflects the dynamics of unemployment in the United States. It is often said that this indicator ‘moves the markets’.
- Country of Publication: United States;
- Publication Date: on the first Friday of the month
- Source: Bureau of Labor Statistics, Department of Labor (U.S.)
- Web Site: www.bls.gov/news.release/empsit.toc.htm
- Significance: high.
How is the Nonfarm Payrolls indicator calculated?
- Establishment Employment, which is calculated based on payroll data in the non-agricultural sectors (NonFarm Payrolls).
- Household Employment, which is formed based on a sample personal survey of 60,000 people among the working-age population of the United States, including agricultural workers and self-employed individuals. The list includes those who:
- self-employed – was engaged in their own business or received a salary during the last week;
- did not go to work for a valid reason (vacation, illness, etc.) during the last week, but still had a job or business.
Those who do not fall into the list, meaning they are officially unemployed, are citizens of the United States who did not have a job but tried to find one in the last four weeks.
How does the NFP report affect the foreign exchange market?
Analysts often call the Nonfarm report an indicator that can change current trends.
Strong movement after the release of changes in the number of non-agricultural sector employment is mainly due to the fact that this indicator is almost impossible to predict, as it is always unexpected and the values differ significantly from previous ones.
Information about the average weekly working hours, average weekly wage, and average hourly wage is also included in the Nonfarm Payrolls economic indicator report. An increase in these values contributes to the strengthening of the dollar’s exchange rate.
FAQ
What is Nonfarm Payrolls (NFP)?
Nonfarm Payrolls (NFP) is an economic indicator that shows the number of new jobs created in the non-agricultural sectors of the U.S. economy each month.
How does NFP affect the forex market?
A higher-than-expected NFP report typically strengthens the U.S. dollar, while a lower-than-expected report weakens it.
Why is NFP important?
NFP is a key indicator of the U.S. labor market and provides insights into overall economic health, influencing monetary policy and currency values.
