Let's start with a riddle today. Every month there is one economic number that comes out that can swing the stock markets. It can move bond yields and even push the dollar higher or lower. And despite its importance, it has a very odd name. Non-farm payrolls. Recently, it even cost someone their job. Specifically, the head of the Bureau of Labor Statistics, BLS, was fired by President Trump just hours after releasing a week report. So, here's the question. Why is one of the most watched measures of the US economy defined by what it isn't? Farming. And more importantly, what does this number actually tell us? The non-farm payrolls report often shortened to NFP. This tracks how many jobs were gained or lost in the US economy each month. But as the name suggests here, it excludes one group, farm workers. And at first glance, that might sound a little bit unfair. Let's face it, farms are part of the economy. People work there. So why would you leave them out? Well, the main reason comes down to volatility and farming jobs, they swing wildly with the seasons. You got planting and harvest periods. We see huge spikes there. Winter often brings sharp declines. Then you add in weather. So droughts, floods, storms, and farm employment numbers can change dramatically from month to month. Now, another factor is that farming still today remains highly familyrun. So many workers don't even appear on traditional payroll systems. that makes the data inconsistent with the rest of the economy. Finally, here it's not that farms don't count. They're actually tracked separately through different agricultural surveys. The headline jobs report just aims to give a steadier broader picture without that noise and disruption of the farm specific swings. So, when you hear non-farm, think of it less as an exclusion of farms, but more as just filtering out all the static. Now, what is included? If we carve out farming, what's left? The answer is quite a bit. In fact, non-farm payrolls covers about 80% of the US workers. So that includes jobs across nearly every major industry grouped into three broad categories. First, you have the goods producing industries. That means construction, manufacturing, whether it's durable goods like cars, non-durable goods like food and resource extraction industries like mining, quarrying, oil and gas. Now second, there's a much larger service producing sector and this is where the majority of US jobs sit. It covers trades, transportation and utilities, information industries like media, telecom, parts of the tech sector, financial activities including banking, insurance and real estate, professional and business services like consulting, law and temp agencies, education and health services, leisure and hospitality, meaning restaurants, hotels, entertainment. And finally, there is a catchall category. It's called other services and that includes everything from repair shops to salons to nonprofits. Now third, we have government unemployment and that is federal, state, and local jobs including teachers and public schools and staff at public universities. So in short, non-farm payrolls is basically the broad US market, just not farms. So far, this sounds like a pretty straightforward jobs report. Why then does it move the global markets so much? There are three main reasons for that. First of all, it's an economic health check. If you look at job growth or lack thereof, it is one of the clearest signals about whether the economy is expanding or slowing down. If you see a strong NFP report, that usually points to healthy growing economy. A weak report on the other hand, it raises concerns about a potential slowdown or even a recession. Now, second, it acts as a policy signal. The Federal Reserve, which sets interest rates in the US, it watches employment data very, very carefully. If job growth is hot, it can mean wage pressures and inflation, which may push the Fed towards raising rates. Now, if job growth cools though, it might suggest the economy needs some support, and that would encourage the Fed to cut or hold rates steady. And third, the report is a market mover, and that's because it is released at a single time, usually the first Friday of every month at 8:30 Eastern. Now, investors and traders will react almost instantly. We'll see stocks, bonds, currencies, they can swing within minutes as the markets digest the news. In fact, for short-term traders, that 8:30 a.m. release is one of the most anticipated and sometimes most dreaded moments of the entire month. So, let's look at how this is collected. Is it possible to fudge those numbers? The answer is surveys. Two of them actually. The first one is called the establishment survey. And in this, the BLS collects data from around 120,000 businesses and government agencies that covers about 600,000 individual work sites. In this case, employers report how many people are on their payrolls. That provides the basis for the non-farm payroll number. Now, the second is the household survey. And in this, the BLS contacts around 60,000 households, and it asks people directly about their work status. Are you employed? Are you unemployed? part-time, full-time, or are you not in the labor force? And this survey is what gives us the unemployment rate. So, these two surveys, they are separate, but they're complimentary. Payrolls tracks the number of jobs. The household survey tells us about people. That's why sometimes you're going to see a month where the unemployment rate falls even though payroll growth is weak or vice versa. They're looking at the labor market from different angles. And I want to be clear here, these surveys have been conducted in essentially the same way for decades. The methodology is transparent. It's reviewed by independent statisticians and it's not something that changes from month to month based on politics. I want to look here at why the numbers change. This is another important detail. Non-farm payrolls often get revised. Probably usually when the first report comes out, it is based on partial data because not every employer has reported yet. As more surveys come in, the BLS then revises the number. Sometimes upward, sometimes downward. And this is where you're occasionally going to see a headline something like 200,000 jobs added in March revised down from 250. And beyond that monthly revision, once a year, the BLS also conducts what's called a benchmark revision. And this is where they reconcile the survey results with more complete tax records. And this can lead to even bigger adjustments. So while the initial release does get the headlines, the fuller picture often comes later. At this point, you're probably thinking, "Okay, so these non-farm payrolls, they matter for traders. They matter for the Fed, but what about everyone else?" Well, the reality is interest rate decisions influence things like mortgage costs, car loans, credit card rates, and investors reactions can shape stock market performance, which affects your retirement accounts. Policy makers use this data to guide stimulus programs, tax policy, and government spending. In other words, the NFP report is one of the clearest windows into how the US economy and then by extension the global economy is doing. So, let's recap the key points. Non-farm payrolls are called non-farm because farming jobs are too seasonal and inconsistent to include in the main job tally. The report covers 80% of the workforce across goods producing industries, service providing industries, and government employment. Markets and policy makers care because it signals economic health. It influences the Federal Reserve decisions and it moves financial markets almost instantly. And while the headline number gets all the attention, the data comes from large-scale surveys that often get revised. And that means that the first number isn't always the final story. So next time you hear the headlines about non-farm payrolls, whether the number is strong, whether the number is weak, or it's a revision, you'll know that it is much more than just that strange label. It is actually a monthly pulse check of the US economy minus the noise of the farmwork. That's enough from me. What do you think? Do you find that this measure is useful or do you think it's too broad to really capture the labor market's complexities? Let me know what your thoughts are in the comments. As always, thank you for watching. We'll see you in the next