Many people probably know that. If the economy is good, employment will also improve. However, many people have lost their jobs in the years since the epidemic. With the global economic halt on lockdown, nonfarm payrolls are a measure of how much employment is generated each month.
Nonfarm payrolls, if translated directly, are non-farm employment. Employment in the United States is divided into two categories: agricultural employment and general employment. And what we are talking about is the non-farm sector. Nonfarm Payrolls refers to the employment rate of nonfarm businesses such as services, construction, and manufacturing. The US Department of Labor Statistics does not include employment in agriculture, households, and non-profit organizations.
This indicator first emerged in the 1970s, with the highest employment increase of over 1.115 million in October 1983. This is the rise in employment after the Latin American economic crisis of 1980. The highest decline was 699,000 in April 2009, a 14-month decline since the subprime crisis and a gradual improvement thereafter. When the economy recovers later.
This figure is a compilation of the monthly rate of change. This means the amount of employment increases or decreases compared to the previous month. This will reflect the economic expansion or contraction through non-farm employment that tends to decrease or increase.
As mentioned above When the economy improves, people will spend more money on goods and services.
When demand is so high that labor or service workers are insufficient in production or providing service Therefore, to increase the production capacity or services, it is important that businesses do so to balance customer needs. That’s the increase in employment. It also reflects the economic outlook of entrepreneurs in the future that they are still confident that the economy will continue to expand, resulting in more employment. which increases the cost of production But entrepreneurs have calculated that additional employment, which creates additional labor costs, will help their business become more profitable.
but in the opposite case If that number is negative, it means the economy is slowing down. less consumption and the economy are not doing well in the future, making nonfarm payrolls the leading economic indicator that investors around the world are paying great attention to. This is because it is another important indicator of the future economy through the business sector that actually operates Nonfarm Payrolls.