I only recently truly understood how the non-farm payroll data works and want to share it with everyone because it can directly impact your trading decisions.

First, let's talk about the small non-farm payroll report, officially called the ADP National Employment Report, published by a payroll processing company called ADP. This data usually comes out on the first Wednesday of each month, two days earlier than the official big non-farm payroll report. It reflects the number of new jobs added by private companies in the U.S., excluding government sector data. Because it’s released earlier, the market often uses it to forecast what the big non-farm payroll report will show, serving as a kind of preheat indicator.

Then, the main event—the big non-farm payroll report. This is released by the U.S. Bureau of Labor Statistics (BLS) on the first Friday of each month. The big non-farm covers employment changes across all non-agricultural sectors in the U.S., including private and government sectors, making the data more comprehensive and authoritative. It includes key indicators like new job additions, unemployment rate, and average hourly wages. Honestly, the big non-farm payroll report is the data that can truly shake the market; Federal Reserve decisions and interest rate adjustments are closely related to it.

The biggest difference between the two lies in data sources and coverage. The small non-farm payroll is based on ADP’s client data, only looking at private companies; the big non-farm is an official statistic, covering both private and government sectors, and is far more authoritative. Because of this, the small non-farm often deviates from the big non-farm data, and market attention is clearly more focused on the big report.

In terms of impact on U.S. stocks, the small non-farm payroll, being less authoritative, usually causes limited volatility. But the big non-farm payroll is different; this data can directly change market expectations. If the big non-farm exceeds expectations, it indicates a strong economy, and stocks may rise accordingly; conversely, if the data is weak, investors start worrying about a recession, and stocks tend to fall. My personal experience is that on the day the big non-farm payroll is released, market volatility is often at its peak, so whether you're trading stocks or cryptocurrencies, you need to pay attention to this timing.