What is Non-Farm Payroll (NFP) report & Why NFP is Important?

The Non-Farm Payroll report (NFP) is the US employment report released monthly by the Bureau of Labor Statistics (BLS). It tracks employment trends for the US workers employed in the construction, manufacturing, and services sectors.

The NFP report tracks about 98% of the overall US workforce and excludes workers who are employed on farms as well as those working in private households, government agencies, and non-profit employees. The BLS labour market report shows how many jobs were created in the past month and covers statistics on earnings and hours worked.

As it is technically impossible to survey the entire US Economy each month, the BLS conducts the Current Employment Statistics (CES) survey, which includes a sample of approximately 119,000 businesses and government agencies covering about 629,000 individual worksites. This sample amounts to one-third of all the US NFP employees.

Non-Farm Payroll 2025 Release Dates | NFP 2025 Timeline

For 2025, upcoming US Non-Farm Release Payroll dates are listed here, and as always stands to rock forex traders, and stock market traders alike.

Time-Zone Information & GMT Conversion

The Non-Farm Payroll (NFP) report is released at 8:30 AM Eastern Time (ET), but the corresponding Greenwich Mean Time (GMT) equivalent varies based on whether Eastern Standard Time (EST) or Eastern Daylight Time (EDT) is in effect.

• Eastern Standard Time (EST) is UTC−05:00 and is observed during standard time (late autumn/winter in the United States and Canada).
• Eastern Daylight Time (EDT) is UTC−04:00 and is observed during daylight saving time (spring/summer in the United States and Canada).
• GMT+8 and GMT+7 Conversions:
  • During EST (UTC−5) → The equivalent local time in GMT+8 regions (e.g., Hong Kong, Singapore, Beijing) is 8:30 PM.
  • During EDT (UTC−4) → The equivalent local time in GMT+7 regions (e.g., Bangkok, Jakarta, Vietnam) is 7:30 PM.

*The actual release date may be subject to change

Why is the Non-Farm Payroll report so important?

Watch Our Video for a Quick Introduction to Non Farm Payroll (NFP)!

Traders and analysts place a high importance on the NFP because it is a summary of the state of the US labour market. This is extremely valuable to forex and stock market traders because the Federal Reserve (FED) considers the US employment situation a significant factor when setting interest rates. Also, the NFP change correlates well with annual GDP growth. The benefit of the NFP report is that it is released each month, while the GDP report is published quarterly with at least one month’s lag, thus the NFP report acts as a proxy for GDP.

The fact that the US is the leading economy in the world means that the condition of the US labour market is a sign of the condition of most advanced economies. The US is also the biggest consumer market in the world, and the health of the US economy impacts many other countries that trade with the US.

Furthermore, the Federal Reserve (FED) is paying attention to the flow of new jobs into the US economic system and their mutual effect on the US unemployment rate, for the net contribution may be significant in influencing the employment and unemployment rates.

Unemployment has a direct ripple effect on future inflation. Job creation in the economy generally has positive inflationary effects because individuals with increased spending power have more to buy (i.e., they tend to shop more). In contrast, unemployment has a deflationary impact on the economy. After all, individuals with limited purchasing power tend to spend less (i.e., shop less).

Therefore, the Federal Open Market Committee (FOMC) usually considers rate hikes whenever jobs grow quickly and unemployment is low. In contrast, they consider rate cuts whenever there are widespread job reductions. The NFP report also offers insight into wage changes, another form of inflation. If they indicate an inflation increase by wage increase, the dollar values and the stock market will trend upward.

In its simplest form, the Federal Reserve, and FOMC must strike a balance between the unemployment rate and inflation. The ambition is to have a low unemployment rate and an annual inflation rate of two percent.

How Non-Farm Payroll (NFP) Impacts on Forex and Stocks

As a leading indicator of the US GDP report, the NFP report influences trader sentiment toward the dollar. A strong NFP report may lead traders to buy or hold the dollar, anticipating economic growth. Conversely, if the jobs market disappoints, traders are likely to sell the dollar.”

The stock market will take a more intricate view of the report, but a strong number of jobs added will be bullish. More people employed means that more people are getting paid. That will ultimately find its way into the economy and generate more profit for businesses.

Non-farm payroll components

The Non Farm Payroll (NFP) report is one of the most closely monitored economic indicators and provides important insights into the health of the US economy. It tracks employment trends in key industries such as construction, manufacturing and services, but excludes farm workers, private household employees, government agencies and non-profit workers. Here’s a breakdown of its key components and their importance:

1. Headline NFP Figure

NFP’s headline data reveals the number of jobs created or lost in the previous month. This statistic is particularly important because it reflects the overall state of the labour market. During periods of economic growth, the figure is typically positive, while recessions often produce negative numbers. The headline figure can be volatile, with economists sometimes underestimating or overestimating the outcome. This unpredictability creates trading opportunities, especially for short-term traders.

2. Unemployment Rate (U3)

The U3 indicator shows the percentage of the labor force that is unemployed and actively looking for work. While U3 is the official and most commonly cited number, and also not to be ignored, broader measures such as U6 (which includes discouraged workers and underemployed individuals) can provide more context. These rates are also critical for gauging economic weakness and guiding the Federal Reserve (Fed)’s monetary policy decisions.

3. Sectoral Breakdown

The NFP report also provides details on which sectors gained and lost jobs. For example: A decline in manufacturing or technology jobs could signal challenges in specific industries, affecting the stock prices of companies operating in those industries. Traders and investors who follow these news can use the data to make industry-specific investment decisions and align their portfolios with emerging trends.

4. Average Hourly Earnings

Average hourly earnings provide insightful data on a tight or soft labour market. For example: Rising wages often indicate a tightening labour market, which can push up inflation. However, if wage growth is concentrated in low-wage sectors, the impact on inflationary pressures may be limited. The FED pays close attention to this indicator when setting Interest Rate Policy.

Trading the Non Farm Payroll Report

The NFP report is a key driver of market volatility, and both long-term and short-term traders have the opportunity to benefit from it:

Long-Term Traders: Focus on the report’s broader economic and FED policy implications. They analyze and adjust investment portfolios based on the report’s impact on industry and overall market conditions.

Short-Term Traders: Take advantage of the immediate impact before and after the report is released to predict and execute transactions based on dramatic price changes. Understanding market expectations and deviations from actual numbers is critical.

How economists’ forecasts are arrived at

News organizations like Bloomberg and Reuters compile estimates from 80 to 100 economists and analysts from banks and research firms. The median estimate represents the midpoint of forecasts and serves as a market benchmark. For instance, the market will react more strongly when the actual NFP data deviates significantly from this estimate. For example, the NFP data that exceeds expectations may reveal economic development and forex rate appreciation, while lower-than-expected NFP could indicate economic slowdown, resulting in market correction.

Why It’s Important to Stay Updated

The NFP report affects personal trading strategies and serves as a bellwether for broader economic trends. By staying updated with the latest data and knowing its implications, traders have the opportunity to make informed decisions, manage risk, enhance profit potential, and identify both short-and long-term trading opportunities.