What is NFP?
Nonfarm Payrolls (NFP) is the monthly employment report released by the Bureau of Labor Statistics on the first Friday of each month at 8:30 AM ET. It reports the number of jobs added (excluding farm workers), the unemployment rate, and average hourly earnings.
The three numbers that matter
Jobs added — headline number. Consensus expectations are key
Unemployment rate — a lagging indicator, but big moves get attention
Average hourly earnings (AHE) — the inflation signal. Year-over-year wage growth is what the Fed watches
Why NFP is the most volatile release
NFP combines labor market health (growth signal) with wage inflation (Fed policy signal). These can conflict — strong jobs + high wages = "good news is bad news" for stocks because it implies the Fed stays hawkish.
How to interpret the numbers
| Jobs Report | Wages | Market Read |
|---|---|---|
| Strong jobs + Low wages | Goldilocks | Bullish equities |
| Strong jobs + High wages | Inflationary | Bearish (Fed stays hawkish) |
| Weak jobs + Low wages | Recession fear | Bearish, but dovish Fed |
| Weak jobs + High wages | Stagflation | Very bearish |
Trading tips
The revision matters — previous month's number is always revised. A large downward revision can flip the narrative
Wait 15 minutes — the initial spike often fades or reverses
Watch bonds first — TLT and the 2-year yield react fastest and most honestly
ADP is not NFP — the ADP private payrolls report (released 2 days before) is a poor predictor
Birth-death model — be aware that seasonal adjustments can distort the headline number