NFP Report: September Jobs Data Set for Release as Markets Watch Closely

The long-awaited US Nonfarm Payrolls (NFP) report is finally being released — the first monthly employment update from the US government since the October report, which preceded the federal shutdown that began at the start of last month.

This week's release will cover September's labor-market data, with expectations pointing to a rise of 55,000 jobs, up from 22,000 previously.

A Critical Release Amid Limited Data

The September NFP report, initially scheduled for October 3, comes at a highly sensitive time. Due to the shutdown — which lasted 43 days — the Bureau of Labor Statistics (BLS) confirmed that October's employment data will not be released, citing the inability to collect accurate information during the closure.

This shortage of economic indicators has left policymakers at the Federal Reserve with limited visibility into overall economic conditions, underscoring the importance of this report.

Although the NFP is considered a lagging economic indicator, analysts will treat this release as a primary reference point for assessing the current state of the US labor market, especially as the upcoming reports for September and November will not be published until December 16, after the Fed's final meeting of the year.

How the report might affect Markets according to analysts?

Forecasts indicate the potential addition of 55,000 jobs in September, up from 22,000 in the last reported update, with the unemployment rate expected to remain unchanged at 4.3%.

If job gains align with expectations, the data will provide a clearer picture of a labor market on a weak growth trajectory, consistent with latest trends – please refer to the chart below.

Chart: The weak performance of the Nonfarm Payrolls report over the past years

 Over the months preceding the shutdown, job creation had slowed sharply, averaging 31,000 jobs per month — just one-fifth of the projected 2024 monthly average, according to BLS figures.

Potential Economic Impact of the Nonfarm Payrolls Report

1. Financial Markets

Analysts observe that if the employment report indicates weak results, it could signal a moderate economic slowdown and a decline in purchasing power—both of which may help reduce inflation. Generally, such an outcome would be considered favorable for the markets.

Conversely, if the data is significantly weaker than expected, it could raise concerns about a potential recession or broader economic decline, which would likely have a negative impact on equity markets.

2. Gold

Gold has remained resilient above the $4,000 level despite brief pullbacks. Should the data come in weak—or weaker than expected—this would likely support gold prices on two fronts:

• Increased expectations of further interest rate cuts
• Heightened uncertainty that boosts demand for safe-haven assets

3. US Dollar Index

The US dollar has strengthened recently amid a lack of economic data that could support the Federal Reserve’s stance on rate cuts. However, if the upcoming report shows results below expectations, especially significantly below, this could exert temporary downward pressure on the Dollar Index.

4. The Federal Reserve

If confirmed, this would signal a significantly cooling labor market, further pressured by widespread layoffs across US companies. A weaker-than-expected report would deepen concerns and confirm the severity of the slowdown.

Implications for Federal Reserve Policy

In this scenario, the data could provide the Federal Reserve with greater flexibility to consider another interest rate cut. This consideration follows the Fed's rate cut at its October 29 meeting, which was influenced by signs of a weakening labor market.

Chair Jerome Powell mentioned during that meeting that the recent rate cut was justified by "a labor market that is losing momentum, helping to ease inflationary pressures."

A soft NFP reading would further support an accommodative monetary policy stance aimed at stimulating economic activity and guiding the economy toward its targeted growth path.