Nonfarm Payroll (NFP)

The Nonfarm payroll or NFP is report that is presented every month to the United States Bureau of Labor Statistics with the purpose of representing the totality of the number of workers the United States has. Despite having the name nonfarm payroll, the report does not cover those who have jobs in the general government, private households, nonprofit organizations, and farm employees.

The statistics gathered from the nonfarm payroll is collected on the first Friday of the month. The data is used to aid the policymakers of the government and economists in determining the economy’s current condition and to predict the future levels of its activity.

The nonfarm payroll plays a significant role in the United States because the data from the reports informs the Bureau of Labor Statistics if there was an increase in the number of jobs from the previous month. The report also contains numerous important details regarding the labor force that correlate with the stock market, the value of the United States dollar, and the price of gold. Therefore, the nonfarm payroll is considered an invaluable tool that is used to determine the general health of the economy.

Besides the data on the increase in the number of jobs, the nonfarm payroll also reports the number of unemployment rate in the United States. The unemployment report accounts for the overall unemployment rate that ranges from the youth unemployment rate to the long term unemployment rate.

There is also data that pertains to which sectors in the United States generate the most employment as well as the large gains and losses these sectors experience and by breaking down these sectors, stock analysts are able to predict and pinpoint the stock and sectors that produce strong earning reports. Among those in the list of these sectors include retail trade, financial activities, mining, construction, health care, professional and business services, and hospitality.