Recently, a friend asked me how to understand non-farm employment data, and I found that many people are still a bit confused about the concepts of large non-farm and small non-farm. Today, I’ll briefly sort it out.

First, let’s talk about the large non-farm. The large non-farm is actually the official U.S. employment data released by the U.S. government. Its official name is NFP (Non-Farm Payrolls). It is released on the first Friday of each month at 8:30 a.m. Eastern Time (during daylight saving time) or 9:30 a.m. (during standard time). Taipei time is roughly from 8:30 p.m. to 9:30 p.m. This report is published by the U.S. Bureau of Labor Statistics and includes three key indicators: the number of non-farm jobs, the employment rate, and the unemployment rate. It covers employment conditions in both the private sector and the government sector.

In comparison, the small non-farm (ADP data) is released by a private organization. The ADP Research Institute releases it on the first Wednesday of each month—two days earlier than the large non-farm. The small non-farm data is collected from about 500,000 U.S. companies, reflecting employment conditions for about 35 million private-sector employees. Although it is private data, because the issuing organization has a certain level of authority, it can provide investors with a useful reference before the official large non-farm is released.

Why is the large non-farm so closely watched? Put simply, the non-farm employment data includes jobs across industries such as manufacturing, services, construction, and more. It is an important indicator for measuring a country’s economic health. When the large non-farm figure increases, it means the labor market is active and economic growth is strong; conversely, it may signal that the economy is slowing down. Therefore, the large non-farm data has essentially become a barometer for the ups and downs of the U.S. economy, and it can even influence the Federal Reserve’s interest rate decisions.

How should you look at these data specifically? First, you should pay attention to the unemployment rate, but note that it has a lag, so it’s best to analyze it together with other indicators such as CPI. The productivity of non-farm employment accounts for more than 80% of the U.S. GDP. So when the number of large non-farm jobs rises and the employment rate increases, it indicates rapid economic development, consumer expansion, and naturally a decline in the unemployment rate. This tends to push the dollar to appreciate, which in turn affects the forex market and also has an impact on gold and oil prices. On the other hand, if it indicates a slowdown, it’s a downside signal. Personally, I recommend observing the trend of the large non-farm data rather than focusing only on the absolute numbers—for example, looking at the 12-month average growth trend is more informative.

From the perspective of market impact, the stock market is the most sensitive to the large non-farm. When the data comes in above expectations, investor confidence improves and stock prices are likely to be pushed higher; when the data is worse than expected, stock prices are likely to fall. The forex market behaves similarly: strong large non-farm data usually strengthens the U.S. dollar, while weak data typically weakens it.

Although the cryptocurrency market is not directly affected by the large non-farm, indirect effects still exist. When the large non-farm data is strong, investors may reduce their investments in high-risk cryptocurrencies. However, if the large non-farm data comes as a surprise in the downside direction, some people worry about economic problems and may instead turn to cryptocurrencies in search of an alternative investment. The index market follows a similar logic: strong large non-farm data lifts the broader market, while weak data drags it down.

That said, it’s worth reminding everyone that just how big these effects are still depends on how much the actual data deviates from expectations, along with the state of other markets at the time. As investors, comprehensive judgment is crucial—don’t impulsively place trades based on a single data release. The large non-farm is an essential reference indicator for macro analysis, and learning to use it for analysis is definitely a necessary skill.