Non Farm Payrolls
What is Non Farm Payrolls?
The Nonfarm Payrolls (NFP) report — the US jobs report — is released by the Bureau of Labor Statistics on the first Friday of each month at 8:30 AM ET. It shows the net change in employment across all non-farm sectors, covering approximately 80% of US workers who contribute to GDP. It also includes the unemployment rate, average hourly earnings, and labor force participation rate.
Why does it matter for investors?
Full employment is one of the Fed's two mandates (alongside price stability). A strong jobs report can keep the Fed hawkish — maintaining or raising rates. A weak number (below ~150K) can accelerate rate cut expectations. Crucially, average hourly earnings matter as much as payrolls: strong wage growth signals wage-push inflation, keeping the Fed tight even if payrolls disappoint.
What to watch for
- ›Payrolls vs. consensus estimate (100-200K range is "healthy"; below 100K signals slowdown)
- ›Unemployment rate vs. prior month (watch for Sahm Rule trigger: +0.5% from 12-month low)
- ›Average hourly earnings month-over-month (above 0.3% MoM = wage inflation concern)
- ›Prior two months' revisions — often significantly revised and market-moving
- ›Labor force participation rate — rising participation softens unemployment rate signal
When is the jobs report released?
The Nonfarm Payrolls report is released on the first Friday of every month at 8:30 AM Eastern Time by the Bureau of Labor Statistics.
What is the Sahm Rule?
The Sahm Rule is a recession indicator: if the 3-month average unemployment rate rises 0.5 percentage points or more above its 12-month low, a recession has likely already begun. Developed by former Fed economist Claudia Sahm.
How many jobs are needed per month to keep unemployment stable?
Economists estimate approximately 100,000–150,000 jobs per month are needed to absorb new labor force entrants and keep the unemployment rate roughly stable. Numbers consistently below this signal deteriorating labor market conditions.
Market Reaction
QQQ & SPY price change ±5 trading days around this event
Source: Yahoo Finance