NFP stands for Nonfarm Payrolls, a key US economic indicator that measures the number of paid jobs at businesses and government agencies, excluding agricultural employment and certain other categories of workers.
The US Bureau of Labor Statistics (BLS) publishes nonfarm payroll employment data every month as part of its Employment Situation report, commonly called the US jobs report.
When people ask "what is NFP?", they are usually referring to the monthly change in the number of nonfarm payroll jobs. A positive NFP figure means the economy added more payroll jobs than it lost during the reporting period.
A negative figure means payroll employment declined.
NFP is one of the most closely watched labor market indicators because it helps economists, employers, policymakers, and investors understand employment trends across the United States.
It provides insight into hiring activity, business conditions, and the overall direction of the US economy.
Importantly, NFP measures payroll jobs rather than the total number of people employed. A person working two jobs at different employers can be counted twice, while certain self-employed workers are not included.
How Does NFP Work?
Nonfarm payroll data comes from the Current Employment Statistics (CES) survey, also known as the establishment survey. The Bureau of Labor Statistics conducts this survey to estimate how many employees are on payrolls across different industries in the United States.
Each month, the BLS collects payroll information from a large sample of businesses and government agencies. Employers provide information about the number of people on their payrolls, along with employee earnings and working hours.
The survey uses the pay period that includes the 12th day of the month as its reference period. Employees are generally counted if they receive pay for any part of that period, whether they work full-time or part-time. Employees receiving paid leave can also be included.
The BLS analyzes these records to estimate total nonfarm employment and determine how employment has changed from the previous month.
For example, an increase in restaurant, healthcare, and construction employment may contribute to overall job growth. However, job losses in manufacturing or retail could offset some of those gains.
The headline NFP figure reflects the net change across the industries covered by the survey.
This makes NFP useful for identifying whether employers across the economy are generally adding or reducing payroll jobs.
How Is NFP Measured or Calculated?
NFP is estimated through the BLS establishment survey rather than a complete monthly count of every employee in the country.
The BLS collects employment information from sampled establishments and uses statistical methods to estimate employment across the broader economy.
The process also accounts for factors such as businesses opening and closing, normal seasonal hiring patterns, and additional survey information received after the initial report.
The headline monthly change can be understood through a simple calculation:
Monthly NFP Change = Current Month's Nonfarm Payroll Employment − Previous Month's Nonfarm Payroll Employment
For example, suppose the seasonally adjusted estimates show 160 million nonfarm payroll jobs in one month and 160.15 million in the following month.
The difference is 150,000 jobs, meaning nonfarm payroll employment increased by 150,000 during that month.
This is a hypothetical example, not an actual employment report. It represents net job growth, not the total number of people hired. Employers may have hired many more workers while other employees left their jobs or were laid off.
The BLS also applies seasonal adjustments to make monthly comparisons more meaningful. Retail employment, for instance, often increases during the holiday shopping season.
Seasonal adjustment helps distinguish these predictable patterns from broader changes in employment.
Because the figures are estimates, the BLS may revise earlier results as more payroll records become available. It also conducts annual benchmark revisions using more comprehensive employment data, primarily from unemployment insurance records.
What Does NFP Include?
Nonfarm payroll employment covers a broad range of US industries and includes employees working in both the private sector and civilian government.
Private-sector employment includes industries such as manufacturing, construction, healthcare, education, transportation, retail, hospitality, financial services, professional services, and technology.
NFP also includes civilian employees of federal, state, and local governments, such as public school teachers and many government administrative workers.
Despite its name, nonfarm payroll employment does not include every job outside agriculture.
Agricultural workers, private household employees, active-duty military personnel, unpaid family workers, and people who are self-employed in unincorporated businesses are excluded. Independent contractors who are not on an employer's payroll are generally excluded as well.
Employees of nonprofit organizations are generally included when their employment falls within the survey's coverage. The term nonfarm does not mean that nonprofit or government employment is automatically excluded.
The same establishment survey also provides related statistics, including average hourly earnings, average weekly earnings, and average weekly hours.
These figures help explain changes in wages and working conditions, but they are separate measurements from the headline NFP employment change.
Together, these measures give a more complete picture of employment and compensation across the US labor market.
Why Is NFP Important?
NFP is important because employment trends provide valuable information about the strength and direction of the US economy.
When nonfarm payroll employment increases steadily, it can indicate that businesses are expanding operations, increasing production, or responding to stronger demand for goods and services.
When payroll employment declines over an extended period, it may suggest weaker business activity, reduced hiring demand, or broader economic difficulties.
However, one positive or negative NFP report does not establish whether the economy is growing or entering a recession.
Economists typically consider several months of employment data alongside unemployment, wage growth, inflation, consumer spending, and gross domestic product (GDP).
NFP also matters to the Federal Reserve, which is responsible for supporting maximum employment and stable prices. Employment conditions help policymakers evaluate economic activity when considering monetary policy and interest rates.
Financial markets monitor NFP releases for similar reasons. A report that differs significantly from expectations may change investors assessments of economic growth, inflation, and future interest rates. The direction of any market reaction is not guaranteed.
For businesses, the practical value of NFP lies in understanding labor market conditions rather than trying to predict financial markets from a single report.
How Does NFP Affect US Employers and Payroll?
Nonfarm payroll data does not directly determine how much an employer must pay employees. Instead, it provides economic context that can influence hiring plans, compensation decisions, and payroll budgets.
Hiring and Workforce Planning
Employers can use NFP trends to understand whether job opportunities are expanding or contracting across the economy.
Strong employment growth in a particular industry may indicate greater demand for workers. In some cases, this can increase competition for qualified candidates and make recruitment more challenging.
Slower employment growth may suggest more cautious hiring conditions. However, national figures should be compared with local labor market information and industry-specific employment data before making staffing decisions.
Businesses can combine these insights with internal workforce requirements to improve workforce planning.
Wage Trends and Employee Compensation
The establishment survey also provides average hourly earnings data, which employers can monitor alongside NFP employment figures.
Rising wages across an industry may indicate increasing labor costs or stronger competition for workers. Employers may use this information as one factor when reviewing salary structures, recruitment offers, and compensation budgets.
However, average hourly earnings should not be confused with individual wage increases. Changes in the composition of employment, including shifts between higher-paying and lower-paying industries, can affect the reported average.
Employers should also consider occupation-specific pay data, geographic differences, employee experience, and internal compensation policies.
Payroll Budgeting and Labor Costs
Changes in employment and wages can influence a company's expected payroll expenses.
For example, a growing healthcare company may need to expand its staffing budget if industry employment and compensation trends suggest continued demand for workers.
Payroll managers can use NFP data as one external reference when estimating future staffing costs. These estimates should also account for salaries, overtime, bonuses, benefits, and employer payroll taxes.
A structured payroll budgeting process helps employers evaluate these expenses against business needs and available financial resources.
Payroll Forecasting and Business Decisions
HR and finance teams can also use NFP trends when developing different hiring and compensation scenarios.
For instance, a business may prepare one payroll forecast based on continued hiring and another based on slower workforce growth.
National employment figures provide context for these scenarios, but a company's actual payroll records, operating forecasts, and local hiring conditions should remain the primary inputs.
PayDay's payroll forecasting guide explains how businesses can estimate future compensation expenses and prepare for changes in staffing requirements.
NFP vs. Unemployment Rate: What's the Difference?
NFP and the unemployment rate are both major US labor market indicators, but they measure different things.
Nonfarm payrolls measure the number of payroll jobs reported by businesses and government agencies within the establishment survey's coverage. The headline monthly figure shows the net change in those jobs.
The unemployment rate measures the percentage of the civilian labor force that is unemployed. It is based on the Current Population Survey (CPS), commonly called the household survey.
The household survey collects information from individuals about their employment status and job-search activity. It includes categories of workers that are not included in the establishment survey, such as certain self-employed individuals and agricultural workers.
Another important difference is how multiple jobs are counted. The establishment survey may count a person twice if they work for two different employers. The household survey counts that person as one employed individual.
As a result, NFP can increase even when the unemployment rate rises. This may occur because the surveys use different definitions and samples, or because the number of people entering the labor force grows faster than employment.
Neither indicator tells the complete story alone. Reading them together provides a better understanding of US employment conditions.
How Often Is NFP Reported or Updated?
The Bureau of Labor Statistics publishes NFP data monthly as part of the Employment Situation report.
The report is generally released on the first Friday of the following month at 8:30 a.m. Eastern Time, although the exact date can vary because of holidays and other scheduling considerations.
The release contains employment data for the previous reference month, along with related information about earnings, working hours, and unemployment.
The initially published figures are preliminary. The BLS typically revises the previous two months of establishment survey estimates as additional responses become available.
Annual benchmark revisions can also adjust historical employment estimates using more comprehensive administrative records.
Readers can confirm upcoming publication dates through the official BLS Employment Situation release schedule.
Where Can You Find the Latest NFP Data?
The most reliable source for the latest nonfarm payroll data is the US Bureau of Labor Statistics.
The BLS publishes headline employment figures in its monthly Employment Situation report, including the number of jobs added or lost and changes in employment across major industries.
For more detailed information, the Current Employment Statistics program provides historical employment data, industry breakdowns, working hours, and earnings statistics.
Employers reviewing these figures should consider the latest revisions and compare employment trends across several months rather than relying on a single report.
For broader business and payroll guidance, readers can also explore the PayDay blog, which covers payroll management, workforce costs, and employer responsibilities.
Frequently Asked Questions About NFP
What Does a Positive or Negative NFP Number Mean?
A positive NFP number means the US economy experienced a net increase in nonfarm payroll jobs during the reporting month. A negative number means there was a net decline. A smaller positive number still indicates job growth, but at a slower pace than a larger positive reading. One month's result should be interpreted alongside longer-term employment trends.
Does NFP Include Government Jobs?
Yes. NFP includes civilian employees working for federal, state, and local governments. This covers many public-sector jobs, including public education and government administration. Active-duty military personnel are excluded from nonfarm payroll employment.
Are Part-Time and Temporary Employees Included in NFP?
Yes. Part-time and temporary employees are generally included when they are on a covered employer's payroll and receive pay during the survey's reference pay period. The establishment survey counts qualifying payroll jobs regardless of whether employees work full-time or part-time.
Can Someone With Two Jobs Be Counted Twice in NFP?
Yes. If someone works for two different employers and appears on both payrolls during the reference period, the establishment survey counts two jobs. This is one reason NFP measures payroll employment rather than the number of unique people employed in the United States.
Why Are NFP Numbers Revised After Publication?
Initial NFP estimates are based on survey responses available when the report is prepared. As more employers submit payroll information, the BLS updates its estimates. Additional changes can occur through seasonal adjustments and annual benchmarking. These revisions help improve the accuracy of published employment data.
Does NFP Show Whether US Wages Are Increasing?
Not directly. The headline NFP number measures changes in payroll employment, not wage growth. However, the same establishment survey publishes average hourly and weekly earnings data. Employers and economists can review these separate figures to evaluate broader compensation trends.
