Non-Farm Payrolls

Non-farm payrolls is the headline number from the Employment Situation report, the US Bureau of Labor Statistics' monthly account of the labour market. It comes from the establishment survey, a large sample of businesses and government agencies that report how many people were on their payrolls during the pay period containing the twelfth of the month. Farm workers, private household employees and the self-employed are left out, which is where the name comes from.

Few scheduled releases move as many markets at once. The figure is read as a direct gauge of how hard the economy is running, and through that, of how the Federal Reserve is likely to set interest rates. A gain well above the consensus estimate has historically tended to lift Treasury yields and the dollar, while a clear miss has tended to do the opposite. Equities and gold can go either way: strong hiring is good for earnings but may imply tighter policy for longer.

The first print is provisional. Each report revises the two prior months as more survey responses arrive, and those revisions are sometimes larger than the surprise in the new month. Once a year a benchmark revision realigns the series with unemployment-insurance tax records, which can shift the level of employment by hundreds of thousands of jobs. Strikes, severe weather and seasonal adjustment around holidays all add noise.

The same report carries the unemployment rate and average hourly earnings, so traders rarely react to payrolls alone. ADP's private-payrolls estimate, weekly jobless claims and the JOLTS openings survey are the usual previews.