NFP
The Non-Farm Payrolls report — released on the first Friday of each month by the BLS — measuring net new jobs added to the US economy and one of the most market-moving data releases in global finance.
The macro regime is unambiguously STAGFLATION DEEPENING. The three-pillar structure remains intact and strengthening: (1) Energy-driven inflation shock — WTI at $104-111, +40% in 1M, flowing through PPI (+0.7% 3M, accelerating) into a CPI/PCE pipeline that has not yet absorbed the full pass-through,…
What Is NFP?
The Non-Farm Payrolls (NFP) report is the employment situation summary published by the Bureau of Labor Statistics (BLS) on the first Friday of every month. It reports the net change in the number of paid US workers, excluding farm workers, private household employees, and non-profit organisation employees.
What's In the Report
The headline NFP number gets all the attention, but the full report contains critical detail:
- Headline payrolls: Net new jobs (establishment survey of ~122,000 businesses)
- Unemployment rate: Percentage of the labour force that is jobless (household survey)
- Participation rate: Percentage of working-age adults either employed or actively seeking work
- Average hourly earnings: Year-over-year wage growth — crucial for the inflation outlook
- Average weekly hours: An early indicator of labour demand (employers cut hours before cutting workers)
- Revisions: Prior months are frequently revised significantly — often more important than the headline
Why NFP Dominates Markets
Labour market data is the second half of the Fed's dual mandate (maximum employment + price stability). A stronger-than-expected NFP raises fears the economy is overheating, pushing yields up and equities down. A weak print raises recession fears or hopes of Fed cuts.
The "Bad News is Good News" Regime
When the Fed is actively hiking, a weak NFP is sometimes cheered by equity markets because it implies the Fed may cut sooner. This perverse dynamic reverses once rate cuts are priced in and recession risk becomes the dominant concern.
Consensus and Market Reaction
The consensus estimate (surveyed by Bloomberg or Reuters) sets the expectations bar. Typically:
- Miss by >50k: Significant USD weakness, yield drop, equities mixed
- Beat by >100k with strong wages: Significant USD strength, yields up, equities under pressure
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