Nonfarm Payrolls (NFP)

Nonfarm Payrolls (NFP) is released on the first Friday of every month at 8:30 AM ET by the Bureau of Labor Statistics, and it is the single most market-moving economic release on the calendar. The report captures three numbers that traders dissect simultaneously: the headline payrolls count (how many jobs were added outside of farm work), the unemployment rate, and average hourly earnings (AHE) — the wage inflation signal.

NFP creates a unique "good news is bad news" dynamic that trips up traders every cycle. Strong job growth with rising wages tells the Fed that the economy is running hot, which argues for keeping rates higher for longer. That's bearish for equities even when the underlying jobs numbers look healthy. The sweet spot markets want is solid payrolls with tame wage growth — the goldilocks scenario.

Three things separate experienced NFP traders from the crowd. First, the prior month revision often moves markets as much as the headline — a large downward revision can flip the narrative entirely. Second, the ADP private payrolls report released two days earlier is a poor predictor of NFP and should be treated as independent data, not a preview. Third, the unemployment rate is a lagging indicator — sharp moves in the headline jobs number matter more than a 10 basis point shift in unemployment.

On NFP Friday, size down, watch the 2-year Treasury yield as your real-time read on rate expectations, and wait for the initial spike to settle before entering.