NFP (Non-Farm Payrolls) explained: what it is and how to read it

What is the NFP

Non-Farm Payrolls (NFP) is the monthly US employment report published by the Bureau of Labor Statistics. It shows how many jobs were created or lost in the month, excluding the farm sector and a few others.

When is it released

Usually on the first Friday of the month at 8:30 a.m. New York time, which is 13:30 UK time. Always check the date in the economic calendar, because in some months it can shift.

Why it moves the market

Employment is one of the Federal Reserve's two main reference points, together with inflation. A very strong or very weak labour market changes rate expectations and therefore the dollar, government bonds, gold and equity indices.

What to look at beyond the headline number

• Revisions to the previous two months, sometimes more important than the new figure
• The unemployment rate
• Average hourly earnings growth, which hints at inflation
• The comparison between the actual figure and analyst forecasts

How price behaves

In the seconds after the release, wide spreads, slippage and moves in both directions are normal. Many traders stay out of the market before the event or wait for volatility to settle. There is no rule that always works: what matters is to decide your plan beforehand, not during the release.