Will US NFP accelerate in October after the disappointing September print?
FXStreet · FXStreet Team ·
The United States (US) Bureau of Labor Statistics (BLS) is set to release October Nonfarm Payrolls (NFP) data on Friday at 13:30 GMT. The report is expected to show an increase of 65K jobs, up from 29K in the previous month.
US Nonfarm Payrolls are expected to rise by 65K in October, following September’s disappointing 29K increase.The Unemployment Rate is forecast to stay unchanged at 4.2%.Employment data could influence the US Dollar’s valuation, although markets widely expect a 25 bps rate hike in December.The United States (US) Bureau of Labor Statistics (BLS) is set to release October Nonfarm Payrolls (NFP) data on Friday at 13:30 GMT. The report is expected to show an increase of 65K jobs, up from 29K in the previous month. Even though market participants widely expect the Federal Reserve (Fed) to raise the policy rate by 25 basis points (bps) in December, the underlying details of the employment report could impact how they perceive the policy outlook in early 2027 and drive the US Dollar’s (USD) valuation.What to expect from the Nonfarm Payrolls report?Investors expect NFP to rise by 65K in October, following the disappointing 29K increase recorded in September. The Unemployment Rate is forecast to remain unchanged at 4.2%, while the monthly wage inflation, as measured by the change in Average Hourly Earnings (AHE), is projected to rise to 0.3% from 0.1%.The Fed left the policy rate unchanged at the range of 3.75%-4% after the October policy meeting, as anticipated. In the post-meeting press conference, Fed Chair Kevin Warsh described labor market conditions as “positive,” adding that the discussion among policymakers is focused mainly on the price stability mandate. Hence, a noticeable shift in the market pricing of the Fed rate decision next month is unlikely unless there is a significant negative surprise in the employment data.According to TD Securities, the US Dollar’s sharp rally since September is likely to give way to a period of consolidation into year-end. The bank reiterates that “after a sharp rally since September, our base case has been for the USD to see a modest relief selloff into year-end, similar to how the USD had performed following the 2018 US midterm election.” Strategists argue that incoming labour market data could be pivotal, noting that “a lower-than-consensus payrolls number could provide an additional catalyst for the USD retracement to take shape.” In that context, they “expect October NFP to remain subdued at 40k after job gains moderated to 29k in September,” reinforcing the view that softer US data would help extend the Dollar’s post-election pullback.
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