Nonfarm payroll is considered a lagging economic indicator because it reflects historical trends in the labor market rather than providing insights into future economic activity.

Lagging indicators tend to follow changes in economic activity and are generally used to confirm the trend of an economy that has already been established. Nonfarm payroll is released on a monthly basis and measures the total number of workers employed in the nonfarm sector of the economy.

An increase in nonfarm payroll typically indicates that the economy has already experienced a period of economic growth, leading to job creation and increased demand for labor. Conversely, a decrease in nonfarm payroll generally indicates that the economy has already experienced a period of economic contraction, leading to job losses and decreased demand for labor.

However, nonfarm payroll can be influenced by various factors such as changes in government policies, demographic trends, and changes in industry composition. These factors can cause nonfarm payroll to lag behind changes in the overall economy.

Overall, while nonfarm payroll provides important insights into the health of the labor market, it is considered a lagging economic indicator because it reflects past performance rather than providing insights into future economic activity.