The Nonfarm Payroll is a report generated and reported monthly by the U.S. Bureau of Labor Statistics which aims to show the overall number of paid workers in the United States. The report does not include workers from general government jobs, private household jobs, those who are employed by nonprofit organizations and farm employees.
This used by economists and government policy makers to aid them with figuring out the present state of the economy and predicting the future levels of economic activity.
Why is it Important?
One of the important data reported in the Nonfarm payroll report is the amount of additional jobs added compared to the last month. It also has lots of important insights into the labor force that directly impacts the stock market, the price of gold and the value of the U.S. dollar. The Nonfarm payroll report is used to determine economic health.
It also shows data of unemployment in the U.S. workforce. This is conveyed by the total unemployment rate, unemployment rate for the long term and unemployment rate of the youth. The labor force participation rate is another important statistic used to find out the real unemployment rate of the country.
What does it Report?
Data from the nonfarm payroll also displays which sectors are generating the most employment additions. The report shows the gains and losses among all the sectors. Business services, healthcare, financial activities, mining construction, manufacturing, wholesale trade and retail trade are among the sectors listed on the report. Stock analysts use this categorization by sector to predict which stocks and sectors have strong earnings reports.
Additional data like average work week and average hourly earnings are also within the report. Wage growth is also conveyed within the report. Each new report may contain revisions of previous reports.