What are Non-Farm Payrolls?


What are Non-Farm Payrolls?

Traders largely look for volatility. And where better place to look but the NFP or Non-farm payroll figures released monthly in the US.

But what are Non-Farm Payrolls? Non-farm payrolls are an economic data release that show the number of jobs there are in the states – BUT – the number excludes farm workers (hence the non-farm part)

The Bureau of Labour Statistics or the BLS are the body that collect and release this dataset. Coupled with the release of non-farm payrolls is the release of unemployment data. All of this data is released together in the Employment Situation report.

As we mentioned previously, the Non-Farm Payrolls data is a monthly release and is usually released on the first Friday of each month. Exceptions to this rule can be made for example if there are crazy weather conditions and certain people can’t get to certain places!

Non farm payroll

Farming jobs aren’t the only jobs that are excluded from the report, however. Non-profit organisation employees, certain government jobs and private household employees are also excluded from the data.

The reports look at 2 surveys:

  1. The Household Survey (gender, race etc)
  2. The Establishment Survey (hours, earnings etc)

non farm payrolls

The number expected and previous releases can usually be found on any half-sensible economic calendar. There are plenty of these available online. When the figure is released it is a measure of how many jobs have been added or lost in the economy across the last month of trading.

The non-farm payroll figures are usually in the tens of thousands or hundreds of thousands (although over the COVID pandemic we saw numbers into the millions!) If the actual figure is a beat on the consensus number – This is seen as positive for USD and it should rise in value. The inverse is obviously also true. If the release is a miss, the USD should decrease in value.

The logic behind the moves discussed above are that an increase in jobs added to an economy results in (shocker) more people with jobs. Companies with the ability to hire more staff mean that the companies are growing nicely. And more people with jobs equals more salaries that can be spent on goods and services, further boosting the economy.

Ultimately, Non-Farm Payrolls are an indicator of the US economy’s health.

It’s also worth noting that the figures from previous months can be revised – And this can also have an effect on the market depending on which way the revision has gone.

Which Markets are affected by Non-Farm Payrolls?

  1. Currency pairs quoted against the USD
  2. Gold is usually influenced greatly by NFPs
  3. Equities are also largely affected by this number
  4. Too a smaller degree – The USD Index
  5. The bond markets

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How do Non-Farm payrolls affect the market?

As mentioned above, a beat of the consensus figure means that more jobs have been added to the economy. This is positive as it means firms are growing and people have more money to pump back into the economy by way of spending. If the economy is growing, this is positive for the Country, therefore the USD increases in value. Any other currency that the USD is quoted against (ie USDJPY, USDCAD) will decrease in value.

Just to ensure you understand the impact let’s take a look at a few crosses to see the impact:

Scenario 1

NFP Consensus = 100k

NFP Actual Release = 300k (beat)

USDJPY Price pre-NFP = 106.00

USDJPY Price post-NFP = 106.80

Scenario 2

NFP Consensus = 200k

NFP Actual Release = 350k (beat)

EURUSD Price pre-NFP = 1.2000

EURUSD Price post-NFP = 1.1950

Scenario 3

NFP Consensus = 200k

NFP Actual Release = 100k (miss)

USDCAD Price pre-NFP = 1.2550

USDCAD Price post-NFP = 1.2500

Scenario 1 = a beat of consensus. Positive for USD. USDJPY price increases.

Scenario 2 = another beat of consensus. Positive for USD. EURUSD price decreases

Scenario 3 = a miss. Negative for USD. USDCAD price decreases.

While scenarios 1 and 3 are simple to follow. You may have a few questions as to why in scenario 2 the price goes down after a beat? This is simply because in scenarios 1 and 3, the USD is the base currency (i.e. it comes first in the quoted currency pair) In scenario 2, USD is the term currency or quoted currency (i.e. it comes second in the currency pair quote) Because of the miss, the USD is decreasing in value against the EUR hence the price movement.


ADP stands for Automatic Data Processing. That’s the name of the company that process the data of this economic release.

The report details the change in employment of non-farm employment. This report is usually released on the first Wednesday of the month. (2 days before NFPs) ADP create their report based on the payroll data of over 400k USD businesses.

The figure is largely used to predict the US governments Labour Market Report although the relationship between the ADP and NFP numbers isn’t always correlated as expected.

Non Farm Payrolls Predictions

On the day of the release of Non-Farm Payrolls (and in the days leading up to) Banks will publish their predicted NFP number. Whilst this may sound like a great insight into what the number might be – and a possible market cheat-sheet – The spread of predictions is usually very wide!

What are non-farm payrolls

On every trading desk we’ve ever worked on, we would login to our Bloomberg terminals, find the Non-Farm Payrolls predictions – Add them to our whiteboard and take a median reading. We would also make predictions ourselves, with the winner on the desk either taking a small kitty or the worst predictions having to go on a coffee run!

As previously mentioned, the predictions or the market consensus can be found online on most economic calendars as well as all of the other economic releases that are released with NFP like average hourly earnings and the unemployment rate. It’s the beats, misses and revisions of this data that causes an impact in the markets.

Non-Farm Payrolls: Economic Release Example

When Non-Farm Payrolls are released, a whole host of other numbers are also released. Here is an example of the data that is released in the report:

  • NFPs themselves
  • Goods and Services Trade Balance
  • Average Hourly Earnings
  • Average Weekly Hours
  • Goods Trade Balance
  • Labour Force Participation Rate
  • Average Hourly Earnings
  • U6 Unemployment Rate
  • Unemployment Rate

(A host of unrelated Canadian data often gets released at the same time)

Canadian Dollar

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Good luck and Happy Trading!


By Chris

Chris is one of two founding members of TradingHalo. He started his career in equities as an execution dealer for a large stock-broking firm before going on to run their derivatives desk. From there, he went on to join Smart-Live Markets and then GKFX, where he assisted in their pioneering of MT4-based spread-betting and became a senior trader running large positions across a variety of asset classes including FX, Metals, Commodities, Indices and Single Stocks. Chris now works at one of the largest FX brokerages in the world and is currently Head of Trading in London. Away from Trading, Chris is an avid golfer (or at least, tries to be)