What Is The Nonfarm Employment Change?

What Is The Nonfarm Employment Change?

The U.S Nonfarm Employment Change, also known as "Non-Farm Payrolls" (NFP) and the "Employment Report", is a monthly economic indicator used to measure the change in the number of employed people, excluding the farming industry.
Each month the Current Employment Statistics program surveys about 150,000 businesses, representing approximately 390,000 worksites, in order to provide detailed industry data on employment, work-hours, and earnings of workers on nonfarm payrolls for all 50 US states. The survey is then published on the first Friday of each month.
The NFP is an important leading indicator that also affects consumer spending, which accounts for a majority of overall economic activity. Traders value the indicator with the highest importance as its early monthly release can set the tone for the rest of the month's market movement. Investors should also note Thursday's 12:15 GMT release of Automatic Data Processing Inc. (ADP) estimate of Non-Farm Employment Change. In the past ADP has provided an accurate assessment of what was to come from the actual NFP release a day later. However, with the volatility of world economies in recent months, the ADP report has not been able to correctly estimate the Non-Farm Payroll outcome, only strengthening the real power behind Friday's news release.