I just looked into what NFP is in detail and realized that this is an indicator every trader should pay attention to. Today, I’d like to share a few things about non-farm payrolls because they truly have a major impact on the market.

What exactly are non-farm payrolls (NFP)? In practice, it is a report on employment conditions in the U.S. published monthly by the Bureau of Labor Statistics. This indicator includes all occupations and industries except agriculture, government work, non-profit organizations, and household employees. In other words, it reflects the real health of the U.S. economy through employment data.

There are two types of data you need to know. First, official NFP is released on the first Friday of every month at 8:30 AM or 9:30 AM EST. Second, the ADP report (small non-agricultural) is released earlier on Wednesday, which serves as a “forecast” for the official data. Although ADP is unofficial, it is fairly reliable, and many traders use it to make preliminary predictions.

Why is non-farm payrolls so important? Because it directly affects the FED’s interest-rate decisions. When NFP beats expectations, the Fed may raise interest rates; conversely, when it is weak, it may cut rates. And the Fed’s decision affects the entire global financial market.

Look at the specific impact: If the data is stronger than expected, stock markets usually rise (because the economy is doing well), the U.S. dollar strengthens, but cryptocurrencies may fall because investors shift toward traditional assets. On the other hand, if NFP is weak, stocks decline, the dollar weakens, but crypto can be seen by investors as a safe haven.

When reading the NFP report, I usually don’t just look at the absolute figure—I also compare it with expectations and the 12-month trend. The unemployment rate is also important, but it often comes with a lag. To understand it more clearly, you need to combine it with CPI and GDP.

Remember, understanding what non-farm payrolls are is important, but it isn’t the only factor. You should monitor it together with other indicators and always manage risk carefully. That’s why I always pay attention to the monthly NFP releases.