September Jobs Report Preview: Investors Brace For Key Data Ahead Of November Fed Meeting

All eyes are on the Bureau of Labor Statistics’ job market report for September, which will be released on Friday at 8:30 a.m. ET. This report will unveil the highly anticipated non-farm payrolls (NFPs) figure for last month, as well as updates on the unemployment rate and wage growth.

It is the most eagerly awaited macroeconomic data of the week, as it has the potential to trigger significant market reactions and influence investor expectations regarding the Federal Reserve’s next interest rate decision.

Leading up to the BLS jobs report, the week witnessed a major disappointment in the form of the ADP National Employment report. It showed 89,000 new private sector jobs added in September, down from the previous month’s 180,000 and well below the expected 153,000.

On Thursday, initial jobless claims saw a slight increase, reaching 207,000 for the week ending Sept. 30, up from 205,000 the previous week but still lower than the expected 210,000.

Traders are pricing in a 20% probability of a Fed rate hike in November and a 34% chance of a hike in December, according to CME Group’s FedWatch Tool.

September Jobs Report: Economist Expectations

• Economists’ consensus estimates call for the headline NFP figure to decrease from 187,000 in August to 170,000 in September, marking the lowest level since January 2021.

• The unemployment rate is anticipated to drop from 3.8% to 3.7%.

• Average hourly earnings are projected to increase at a monthly pace of 0.3%, a slight acceleration from the 0.2% seen in August. On an annual basis, wages are expected to maintain a steady growth rate of 4.3%.

Economists’ Views

Citigroup anticipates that all components of the September employment report will indicate a tighter labor market than the consensus suggests. This expectation is based on the low initial jobless claims observed in recent weeks, which could indicate fewer layoffs post-summer.

The firm predicts a 240,000 increase in payrolls, a decline in the unemployment rate to 3.6% and solid 0.3% month-over-month growth in average hourly earnings, with potential upside risks. This should strengthen market expectations of another rate hike by the Fed in November.

The effects of various workers’ strikes are expected to be limited in the September payrolls report, in the Wall Street firm’s view.

Macrobond‘s NFP model suggests that September payrolls increased by 170,000, only slightly softer than the 187,000 reported the previous month.

ING Groep N.V. also expects the NFP figure to come in at 170,000 for September.

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