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Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Nonfarm Payrolls

What it is:

Nonfarm payrolls is an economic indicator released by the Department of Labor on the first Monday of each month at 8:30am EST. The data reflect the change in nonfarm payrolls from the previous month.

How it works (Example):

To give you an example, if the nonfarm payrolls figure released on the first Monday of July is +15,000, 15,000 nonfarm jobs were added in the month of June. The reason agricultural jobs are excluded is the seasonality of hiring on farms, i.e., farms hire many workers during harvest, then let them go afterwards. 

Why it Matters:

This is one of the most important economic indicators observed by financial markets. If nonfarm payrolls are increasing, the economy is growing, and vice versa. The data are revised several times after initially published, and the revisions can play equally important a role in moving financial markets.