How to read the US jobs report (nonfarm payrolls)

What the report is and when it comes out

The jobs report is officially called the Employment Situation. It is published by the Bureau of Labor Statistics (BLS), a US government agency, and covers the previous month. It usually comes out on the first Friday of the month at 8:30 AM ET, though the calendar sometimes shifts because of holidays or how the weeks fall.

Because it arrives before the US stock market opens, futures markets, bond markets and currency markets tend to react first. Check the official BLS release calendar rather than assuming the date.

• Publisher: Bureau of Labor Statistics (BLS)
• Usual timing: first Friday of the month, 8:30 AM ET
• Covers: the prior calendar month
• Confirm the date each month on the BLS schedule

Two surveys, two different pictures

The report combines two separate surveys. The establishment survey asks businesses and government agencies about their payrolls. It produces the nonfarm payrolls number and average hourly earnings.

The household survey asks people in households about their own work status. It produces the unemployment rate and the labor force participation rate. Because the surveys use different samples and methods, they can point in different directions in a given month. Traders often look at whether the two broadly agree or diverge, rather than relying on one number alone.

• Establishment survey: payrolls, average hourly earnings, hours worked
• Household survey: unemployment rate, participation rate
• The household survey counts self-employed workers; the establishment survey counts jobs, not people

The headline numbers and what each tells you

Nonfarm payrolls is the monthly change in the number of jobs, excluding farm workers, private household employees and a few other groups. It is often treated as the headline, but it is only one piece.

The unemployment rate is the share of people in the labor force who are looking for work but do not have a job. Average hourly earnings tracks pay growth and is watched for what it may say about inflation pressure. The Federal Reserve has a dual mandate of maximum employment and stable prices, with a 2% inflation target, so wage growth can matter as much as job counts.

• Payrolls: how many jobs were added or lost
• Unemployment rate: how much slack there is in the labor market
• Average hourly earnings: how fast pay is rising
• Also worth a look: average weekly hours, participation rate, and which industries added or lost jobs

Revisions: the past keeps changing

Each report revises payroll figures for the two prior months as more survey responses come in. The BLS also makes a larger annual benchmark revision that aligns the data with more complete records.

Revisions can change the story. A strong headline paired with downward revisions to earlier months may be read differently than the same headline with upward revisions. Many traders look at the combined picture, including revisions, before deciding what the report says about the trend.

Why surprises move yields, the dollar and index futures

Markets price in a consensus forecast before the release. Prices tend to move on the gap between the actual data and that expectation, not on whether the number is large or small in absolute terms.

A report that looks stronger than expected has often been read as reducing the chance of interest rate cuts, which has tended to lift Treasury yields and the US dollar. Equity index futures have reacted in both directions: stronger data can signal a healthy economy, but can also raise rate worries. Weaker-than-expected data has often had the opposite effects. Exceptions are common, and the initial move sometimes reverses as traders digest wages, revisions and the broader context.

• Consider the consensus forecast and the range of estimates
• Separate the headline surprise from wages and revisions
• Ask what the market was most focused on before the release: growth, inflation or rates

A brief note on Canada's Labour Force Survey

Statistics Canada publishes the Labour Force Survey, a monthly household survey covering employment and the unemployment rate in Canada. It also comes out at 8:30 AM ET and is often released on the same Friday as the US report.

When both arrive together, the Canadian dollar and Canadian bond yields may respond to the combination of the two reports. Reading them side by side can help you understand cross-border moves.

Key terms

Nonfarm payrolls

The monthly change in US jobs from the establishment survey, excluding farm workers, private household employees and a few other groups.

Unemployment rate

The share of people in the labor force who are actively looking for work but do not have a job.

Average hourly earnings

A measure of pay per hour for workers on payrolls, watched as a signal of wage-driven inflation pressure.

Establishment survey

A survey of businesses and government agencies that counts jobs, hours and earnings.

Household survey

A survey of households that measures people's work status and produces the unemployment rate.

Revisions

Updates to previously published figures as more complete data comes in.

Consensus forecast

The typical expectation among economists for a data release, used as the benchmark for measuring surprises.

Labour Force Survey

Statistics Canada's monthly household survey on Canadian employment and unemployment.