Understanding the Significance of Nonfarm Payroll

You might have heard of the Bureau of Labor Statistics (BLS) in the US. It is a government organisation that conducts surveys and offers reports on employment rates, wages, and other factors. Nonfarm payroll is one of the economic indicators used by the BLS to collect information regarding jobs and employment rates in the US. Please continue reading to understand the nonfarm payroll in its entirety.

What is Nonfarm Payroll?

Nonfarm payroll is an economic indicator denoting the number of individuals employed in areas other than farming. Besides farmers, individuals employed in the military (active personnel), non-profit organisations, and private households are also included. It acts as an economic indicator to determine the number of jobs in the US, excluding the aforementioned ones. BLS releases an Employment Situation Summary every month on the first Friday. The nonfarm payroll is included in this report by the BLS. It allows researchers, economists, and policymakers to understand the employment status in the US.

Understanding Nonfarm Payroll

Now that you understand nonfarm payroll meaning, let us delve deeper. It represents the number of individuals working in the private and public sectors, excluding a few jobs. It accounts for around 80% of the total jobs in the US. Farmers, proprietors, individuals working in private householders, and other jobs are excluded from this measure. Since it is disclosed every month in the Employment Situation Summary, it acts as a benchmark for policymakers and economists. You can understand the status of jobs in the US with the help of this measure for consecutive months. You can gauge the number of jobs in manufacturing, education, financial services, and other sectors by only viewing its number.

Employment Situation Summary

The Employment Situation Summary is a monthly report launched by BLS in the US. This report publishes a range of employment insights to the public. It is a popular report launched on the first Friday of every month. One can check the changes in the nonfarm payroll number through this monthly report. Besides that, this report includes other economic indicators. You can find changes in the working hours, earnings per hour, and unemployment rate in the Employment Situation Summary.

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Apart from the basic unemployment rate, the Employment Situation Summary releases some alternate versions. These economic indicators are enough to shape changes in the financial world. Policymakers and leaders in the US rely on this report to make informed decisions. Monetary policy is decided with the help of economic indicators mentioned in the Employment Situation Summary. The Household Survey and the Established Survey are the two major surveys leading to the Employment Situation Summary every month.

Establishment Survey

As discussed above, the Employment Situation Summary is created with the help of two surveys, the Household and the Establishment Survey. Reports of both these surveys are included in the Employment Situation Summary for the public. The Household Survey report includes information on the overall unemployment rate, unemployment rate by gender/race/age/education, reasons for unemployment, and other factors. On the other hand, the Establishment Survey report focuses more on nonfarm numbers. It includes the nonfarm payroll numbers for different industry sectors. Besides these numbers, this survey also determines the hours worked and the average earnings per hour.

Nonfarm Payroll Data and Economic Analysis

The Employment Situation report is highly anticipated by many in the US. While it is an essential indicator, policymakers and analysts wait for the report to discover many other factors. Researchers can indulge in economic analysis with the help of its numbers and other indicators in the report. It can help predict the future economic state of the US and make policies or decisions accordingly.

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The report reveals everything there is regarding the employment status in the US. As a result, it has a significant impact on the stock market. It has an impact on the dollar value, gold price, and other financial instruments in the US. Additions or reductions in the jobs for a given industry sector can reveal so much. One can identify the growing industry sectors with the help of its numbers. Its numbers also help determine the impact of COVID-19, recession, and other events in the US.


Nonfarm payroll is an economic indicator included in the monthly Employment Situation Summary report by BLS. It helps understand the number of jobs in the US, excluding farmers, proprietors, private household workers, active military personnel, and a few others. Policymakers and researchers rely on these numbers to make informed decisions to protect the US economy. Check out the recent nonfarm payroll numbers now!

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