Nonfarm Payrolls (NFP)

Nonfarm payrolls (NFP) is the headline number in the monthly US Employment Situation report: the net change in jobs across the economy, leaving out farm workers, private households and a few small categories. It lands at 8:30 a.m. ET, usually on the first Friday of the month. No data print in global markets is traded more heavily.

Employment is written into the Fed's mandate, so a hot print argues against cuts and a weak one demands them. There is more in the release than the payroll count, though. The unemployment rate comes with it, from a separate household survey, and so do average hourly earnings and revisions to the prior two months. Traders react to all of that at once, and the headline is only one piece.

The headline itself carries a ~±100k confidence interval, wide enough that a later revision often rewrites the story. A strong headline can also sit on weak internals, a big NFP next to rising unemployment and soft wages, and that combination tends to reverse the first move inside the hour.

Say consensus is +160k and the print lands at +85k, with unemployment ticking from 4.1% to 4.3% and the prior month revised down 40k. The 2-year yield collapses 16bp inside two minutes. A basis point is one hundredth of a percentage point. The 2s10s spread bull-steepens 8bp, meaning short yields fall faster than long ones, and fed funds futures go from pricing one cut this year to nearly three. That is roughly a -1.5 z-score surprise, about one and a half standard deviations away from consensus, and a genuine outlier.