What Is Nonfarm Payrolls?

Nonfarm payrolls is the monthly change in jobs added or lost in the U.S. economy, excluding farm workers, private household employees, and nonprofit employees. The Bureau of Labor Statistics releases this figure the first Friday of each month — one of the most important economic releases.

Impact Example

When payrolls are announced, markets react sharply. If expectations were 180,000 jobs added but the actual figure is 250,000:

• Stock market often rises (stronger economy)
• Bond yields rise (less likelihood of rate cuts)
• Dollar strengthens

The 70,000 job surprise moved markets because it shifted economic expectations.

Interpretation

• Strong: 200,000+ monthly jobs (economy expanding, unemployment likely falling)
• Moderate: 100,000-200,000 monthly jobs (normal growth)
• Weak: Under 50,000 or negative (economy slowing or contracting)

Three consecutive months of declining payrolls often precedes formal recession declaration.

Historical Context

The U.S. typically creates 100,000-150,000 jobs monthly just to keep up with population growth. Growth above that indicates net job creation.

When payrolls are strong and unemployment low, the Fed becomes concerned about overheating and inflation, pushing toward rate hikes.