September Nonfarm Payrolls Preview: What to Expect from the US Jobs Report and Fed Rate Outlook
- The United States Bureau of Labor Statistics will release the September Nonfarm Payrolls report on Friday at 12:30 GMT, a release fxstreet.com reported will drive the valuation of...
- Economists surveyed by Reuters and reported by firstpost.com project that nonfarm payrolls rose by 90,000 in September, marking a sharp deceleration from the 162,000 job gain recorded in...
- Firstpost.com noted that Marc Giannoni, chief US economist at Barclays, stated that seasonal adjustments may have significantly exaggerated the employment gains recorded in August.
The United States Bureau of Labor Statistics will release the September Nonfarm Payrolls report on Friday at 12:30 GMT, a release fxstreet.com reported will drive the valuation of the US Dollar and shape market expectations for Federal Reserve monetary policy. Investors are tracking the data to determine whether the central bank will implement another interest rate hike at its upcoming October meeting following a 25 basis point increase in September.
Economists Project September Nonfarm Payrolls Will Slow
Economists surveyed by Reuters and reported by firstpost.com project that nonfarm payrolls rose by 90,000 in September, marking a sharp deceleration from the 162,000 job gain recorded in August. Estimates for the September count range between 35,000 and 180,000. Meanwhile, cnbc.com reported that the Dow Jones consensus looks for job growth of 84,000 to close out the summer. TD Securities projected a more modest increase of 50,000, attributing the slowdown largely to a reversal in seasonal factors and flat government hiring weighed down by a reversal in local hiring, according to fxstreet.com.
Firstpost.com noted that Marc Giannoni, chief US economist at Barclays, stated that seasonal adjustments may have significantly exaggerated the employment gains recorded in August. Despite the headline cooling, cnbc.com reported that payroll gains have broadened across multiple sectors in recent months, with layoffs remaining low and job openings moving slightly higher on net.
US Unemployment Rate Should Hold Steady at 4.1%
The US unemployment rate is expected to hold steady at 4.1% for the third consecutive month, according to firstpost.com. While top-line payroll growth represents a downshift from pre-2025 trends, cnbc.com noted that the jobless rate remains around a level indicating full employment. Economists estimate the US economy needs to add between 50,000 and 80,000 jobs monthly to keep pace with growth in the working-age population. Firstpost.com reported that a low unemployment rate does not necessarily signal a tight labor market, as worker retirements and tighter immigration policies have reduced labor supply and helped contain the jobless rate.
Underlying labor market dynamics present mixed signals. Cnbc.com reported that the most recent Glassdoor survey showed employee confidence falling to a record low in September for the third time this year. Job placement firm Challenger, Gray & Christmas reported that September layoffs dropped 18% from August and fell 20% compared to the same period a year ago, though Allianz Trade senior economist Dan North told cnbc.com that job openings are declining and hiring is creeping down, making it very hard for people to secure new employment. Amid these shifts, Victor Moreno of Jiffy Lube recently spoke to job seekers during the Mega JobNewsUSA South Florida Job Fair held at the Amerant Bank Arena.
Wage Inflation and Artificial Intelligence Support
Federal Reserve officials have emphasized that wage growth is not a primary source of inflation, pointing to a lack of evidence of a wage-price spiral, as reported by cnbc.com. While average hourly earnings are expected to rise 3.2% year-on-year in September compared to 3.1% in August, they have moderated from around 4% at the start of the year. Firstpost.com reported that ongoing artificial intelligence investment continues to support employment in manufacturing and construction. Construction payrolls are forecast to post another strong increase driven by data center infrastructure development, while manufacturing is on track to record its fourth consecutive month of double-digit employment gains linked to AI investments.
Employment Figures Could Influence October Interest Rate Decisions
The September employment figures arrive after the Federal Reserve raised its benchmark interest rate to a range of 3.75-4.00%. Expectations retreated after inflation rose 3% in August, matching the prior month and coming in below market expectations of 3.3%, as detailed by fxstreet.com. Fed Chair Kevin Warsh stated that the labor side of the Fed’s remit is in good shape.
Fxstreet.com reported that an NFP print exceeding 100,000 could revive expectations for an October rate increase and drive the US Dollar higher, while a reading below 50,000 would weigh on the currency. Eren Sengezer, lead analyst at FXStreet, noted, EUR/USD’s near-term technical outlook highlights a bearish stance as it trades well below the 100-day and 200-day Simple Moving Averages.