Nonfarm Payrolls
What Is Nonfarm Payrolls?
Nonfarm payrolls are the total number of paid U.S. jobs outside the farm sector, reported each month by the Bureau of Labor Statistics in the Employment Situation report, the closely watched jobs report. The figure excludes farm work, along with some other categories, and captures how many jobs employers added or cut over the month. It is one of the most market-moving economic releases, because it offers an early, direct read on the strength of hiring across businesses and government. Payroll employment is also one of the key indicators the National Bureau of Economic Research examines when dating recessions, looking beyond GDP to the labor market. Alongside the unemployment rate, nonfarm payrolls form the headline of the monthly jobs report.
Why It Matters
Nonfarm payrolls matter because they provide a timely, broad snapshot of the labor market that investors, businesses, and policymakers act on immediately. A strong payroll gain signals expanding hiring and demand, while sustained losses can mark a downturn, which is why the release routinely moves stock and bond markets. The measure carried real weight in recent recession debates: even when U.S. GDP fell for two quarters in the first half of 2022, robust payroll growth was a key reason the NBER did not classify that period as a recession. Because employment data arrive monthly and are watched so closely, nonfarm payrolls help fill the gap left by GDP, which is only reported quarterly, giving a faster pulse on whether the economy is gaining or losing momentum.