Key economic indicators
US Nonfarm Payrolls
4 min
The Nonfarm Payrolls report — usually just "the payrolls" or NFP — is the monthly US jobs report, and it is one of the most market-moving data releases anywhere on earth. Even Brazilian investors should know it, because it moves the dollar and global risk sentiment.
What it is
Released by the US Bureau of Labor Statistics on the first Friday of each month, it reports how many jobs the US economy added or lost in the prior month, excluding farm workers (hence "nonfarm"). It comes bundled with the unemployment rate and average hourly earnings (a wage-growth and inflation signal).
Why the world watches a US jobs number
The US Federal Reserve has a dual mandate: stable prices and maximum employment. Payrolls is the clearest read on the employment half, so it directly shapes expectations for Fed interest-rate policy.
- A much stronger report than expected → the economy is hot → the Fed may keep rates higher for longer → the dollar tends to strengthen, US bond yields rise, and risk assets (including emerging markets) often wobble.
- A much weaker report → the Fed may cut sooner → the dollar tends to soften, and risk assets, including the Bovespa and the real, can rally.
The emerging-market connection
Because so much global capital is priced off US rates and the dollar, a payrolls surprise ripples straight into Brazil. A blockbuster US jobs number that pushes the dollar up tends to weaken the real and pressure Brazilian stocks, even though nothing changed domestically. This is the clearest example of why a Brazilian investor must watch the global calendar, not just the local one. As with every indicator, the reaction is driven by the surprise versus the consensus forecast, plus the wage figure within the report.
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