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Nonfarm Payrolls

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Nonfarm payrolls represent the total number of US employees on the payroll of businesses during the pay period which includes the 12th of the month. Although nonfarm payrolls represent a very large portion of the US workforce, certain employees are not included in the nonfarm payrolls tally. Farm employees, self-employed individuals, employees on strike, employees on leave or laid off (even for a short period of time) are not included in the nonfarm payrolls total. Nonfarm payrolls are published monthly by the U.S. Bureau of Labor Statistics, Department of labor (BLS) on the first Friday of the month. Nonfarm payrolls are reviewed by market analysts to gauge the state of the economy. A relatively small increase or an outright decline in nonfarm payrolls is typically seen as an indicator of economic weakness. On the other hand, a sharp increase of nonfarm payrolls can signal a strong or booming economy. Although nonfarm payrolls are seasonally adjusted and the BLS tries to highlight special situations affecting the report, certain situations (i.e. unforseen strikes, unpredicted spurts in employment followed by layoffs) and not the state of the economy may be responsible for a change in nonfarm payrolls.

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