Glossary term
Nonfarm Payrolls
Nonfarm payrolls measure the number of jobs added or lost in the U.S. economy outside of farm work, private households, and some nonprofit categories.
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Written by: Editorial Team
Updated
What Are Nonfarm Payrolls?
Nonfarm payrolls measure the number of jobs added or lost in the U.S. economy outside of farm work, private households, and a few other excluded categories. They matter because they are one of the most closely watched monthly signals of labor-market momentum and overall economic strength.
When financial news says the economy added or lost jobs in the monthly payroll report, nonfarm payrolls are usually the number being discussed. The figure is not the same thing as the unemployment rate. It comes from a different survey and focuses on payroll jobs rather than on the share of people who are unemployed.
Key Takeaways
- Nonfarm payrolls track monthly job gains or losses outside of farm employment and a few excluded categories.
- They are one of the most important monthly economic releases for markets.
- Payroll changes are different from the unemployment rate and come from a different labor survey.
- Stronger payroll growth usually signals a firmer labor market and stronger demand.
- Weak payroll growth can raise concerns about slower growth, lower earnings momentum, or recession risk.
How Nonfarm Payrolls Work
Nonfarm payrolls are produced from the establishment survey, which collects employment data from businesses and government agencies. The result is usually reported as the monthly change in payroll employment, such as 150,000 jobs added or 80,000 jobs lost.
That makes payrolls especially useful for tracking job creation trends over time. Because the figure is released monthly and can move markets quickly, it often shapes expectations about growth, inflation, and Federal Reserve policy.
Why Nonfarm Payrolls Matter Financially
Payroll growth matters because jobs drive wage income, consumer spending, and business confidence. A strong payroll report can suggest households have more income support and that employers still want to hire. A weak report can imply softer demand, weaker hiring confidence, or broader economic cooling.
Markets also care because payroll trends affect interest-rate expectations. If job growth stays strong for too long, investors may worry that inflation pressure will remain firm. If payroll growth slows sharply, investors may start expecting easier policy or weaker corporate earnings.
Nonfarm Payrolls Versus Unemployment Rate
Measure | Main focus |
|---|---|
Nonfarm payrolls | Monthly change in payroll jobs from the establishment survey |
Unemployment rate | Share of the labor force that is jobless and actively seeking work |
These numbers can move in different directions because they come from different surveys and answer different questions. That is why investors usually read payrolls together with the unemployment rate, labor-force participation, and average hourly earnings.
Why Revisions Matter
Payroll reports often include revisions to prior months. That matters because a headline number can look strong or weak on first release, while the broader trend changes once earlier estimates are revised. Serious readers therefore usually look at both the latest print and the recent revision pattern.
The Bottom Line
Nonfarm payrolls measure monthly U.S. job growth outside of farm work and a few excluded sectors. They matter because they are one of the clearest high-frequency signals of labor-market momentum, economic growth, and policy pressure.