# Nonfarm Payroll: What It Means and Why It’s Important

![Nonfarm Payroll: A measure of the number of people employed in the U.S., excluding farming, private household, nonprofit, and active military employees and proprietors.](https://www.investopedia.com/thmb/7ai1HNTimGXw2B8uz-1L_YAdGh4=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/nonfarmpayroll-final-0b90b1ff76574d1688478277cd4825d0.png)

*— Zoe Hansen / Investopedia*

> **Definition**
>
> Nonfarm payroll measures the number of workers in the U.S. economy, excluding farm employees, self-employed individuals, volunteers, private household workers, sole proprietors, and active military service members.

## What Is Nonfarm Payroll?

Nonfarm payroll measures the number of workers in the United States except those who work in farming, private households, nonprofits, and sole proprietorships or self-employment, as well as those who are active military service members.

The [Bureau of Labor Statistics (BLS)](https://www.investopedia.com/terms/b/bls.asp) surveys private and government entities throughout the U.S. to obtain information about their [payrolls](https://www.investopedia.com/terms/p/payroll.asp). The nonfarm payroll numbers are reported monthly to the public through the closely followed [employment situation](https://www.investopedia.com/articles/04/092204.asp) summary.

### Key Takeaways

*   Nonfarm payrolls include 80% of the number of workers in the U.S. contributing to gross domestic product (GDP).
*   It excludes farmworkers and workers in several other job classifications.
*   Active-duty military members are also excluded from the nonfarm payroll data.
*   Data on nonfarm payrolls is collected by the Bureau of Labor Statistics (BLS) and included in the monthly employment situation report.
*   The employment situation report includes two surveys: the household survey and the establishment survey.

## Understanding Nonfarm Payroll

According to the BLS, nonfarm employee classifications account for approximately 80% of workers contributing to [gross domestic product (GDP)](https://www.investopedia.com/terms/g/gdp.asp). Besides farmworkers, other categories excluded from nonfarm payroll numbers are:

*   Government-appointed officials and employees of the Central Intelligence Agency, the National Security Agency, the National Geospatial-Intelligence Agency, and the Defense Intelligence Agency (civilian government employees are otherwise counted in nonfarm payroll)
*   Active military service members
*   Private household employees and domestic household workers
*   Unincorporated business owners such as sole proprietors and self-employed workers who operate without registered business incorporation
*   Nonprofit employees

## Employment Situation Summary

The employment situation summary is a closely followed monthly report released by the BLS on the first Friday of the month following data collection. The report is created from two comprehensive surveys: the household survey and the establishment survey.

The household survey reports the unemployment rate and details employment demographics. The establishment survey segment headlines the number of new nonfarm payroll jobs added to the national economy.

### Household Survey

Key components of the household survey include:

*   The overall [unemployment rate](https://www.investopedia.com/terms/u/unemploymentrate.asp)
*   Unemployment rates by gender
*   Unemployment rates by race
*   Unemployment rates by education
*   Unemployment rates by age
*   Reasons for unemployment
*   Employment data by types of alternative employment
*   The [participation rate](https://www.investopedia.com/terms/p/participationrate.asp)

### Participation Rate

The labor force participation rate estimates an economy’s active workforce by the number of people ages 16 and older who are employed or actively seeking employment, divided by the total noninstitutionalized, civilian working-age population.

### Establishment Survey

The establishment survey portion of the employment situation report provides details on nonfarm payroll additions and is referred to as the nonfarm payrolls report. Key components of the establishment survey include:

*   The number of total nonfarm payrolls added by an entity for the reporting month
*   Nonfarm payroll additions by industry category, such as [durable goods](https://www.investopedia.com/terms/d/durable-goods-orders.asp), nondurable goods, services, and government
*   Details on hours worked
*   Details on average hourly earnings

## Nonfarm Payroll Data and Economic Analysis

The nonfarm payroll additions and the unemployment rate are headlines of the employment situation report, but [economists](https://www.investopedia.com/terms/e/economist.asp) and policymakers use all available data to assess the state of the economy and forecast future levels of economic activity.

The report contains insights into the labor force that directly impact the [economy](https://www.investopedia.com/terms/e/economy.asp), the [stock market](https://www.investopedia.com/terms/s/stockmarket.asp), the value of the [U.S. dollar](https://www.investopedia.com/terms/forex/u/usd-united-states-dollar.asp), the value of [Treasuries](https://www.investopedia.com/articles/investing/073113/introduction-treasury-securities.asp), and the [price of gold](https://www.investopedia.com/articles/active-trading/031915/what-moves-gold-prices.asp). The household survey data reveals trends in the unemployment rate and participation rate that may be associated with [demographics](https://www.investopedia.com/articles/investing/012315/how-demographics-drive-economy.asp). The establishment survey report offers valuable information on job changes within sectors or industries.

## How Do Nonfarm Payrolls Impact the Financial Market?

The report contains data and statistics regarding the employment situation in the United States, which can be used to identify trends in economic growth, inflation, housing starts, and gross domestic product, all of which affect the movement of financial markets.

## When Are Nonfarm Payrolls Released?

The data is commonly released on the first Friday of each month at 8:30 a.m. Eastern time and reflects the previous month’s data.

## Is Nonfarm Payrolls a Leading or Lagging Indicator?

The nonfarm payroll report is not a leading indicator but provides a snapshot of incidents that affect the overall economy.

## The Bottom Line

Nonfarm payroll refers to the number of jobs in the private sector and government agencies. It excludes farmworkers, private household employees, proprietors, nonprofit employees, and actively serving military. The nonfarm payroll numbers are reported monthly to the public through the closely followed employment situation report, which details changes in unemployment by sector and demographic and new jobs added within the economy.

> **Article Sources**
>
> 1.  Federal Reserve Economic Data (FRED), Federal Reserve Bank of St. Louis. “[All Employees, Total Nonfarm](https://fred.stlouisfed.org/series/PAYEMS).” Notes.
>     
> 2.  U.S. Bureau of Labor Statistics. “[CES Frequently Asked Questions](https://www.bls.gov/web/empsit/cesfaq.htm#top).” Select “What employment does the CES survey exclude and how does this affect the estimates?”
>     
> 3.  U.S. Bureau of Labor Statistics. “[CES Overview](https://www.bls.gov/web/empsit/cesprog.htm).”
>     
> 4.  U.S. Bureau of Labor Statistics. “[Comparing Employment From the BLS Household and Payroll Surveys](https://www.bls.gov/web/empsit/ces_cps_trends.htm).”
>     
> 5.  U.S. Bureau of Labor Statistics. “[Demographic Characteristics (CPS)](https://www.bls.gov/cps/demographics.htm).”
>     
> 6.  U.S. Bureau of Labor Statistics. “[How the Government Measures Unemployment](https://www.bls.gov/cps/cps_htgm.htm).”
>     
> 7.  U.S. Bureau of Labor Statistics. “[How the Government Measures Unemployment](https://www.bls.gov/cps/cps_htgm.htm).” Select “What are the unemployment rate, labor force participation rate, and employment-population ratio?”
>     
> 8.  U.S. Bureau of Labor Statistics. “[Technical Notes for the CES National Benchmark](https://www.bls.gov/web/empsit/cestn.htm#top).”
>     
> 9.  U.S. Bureau of Labor Statistics. “[Schedule for News Releases; Entire Year, 2025](https://www.bls.gov/schedule/2025/home.htm).”