US NFP Preview:
- Forecasters are looking for jobs growth of +488K while the unemployment rate (U3) is anticipated to drop from 5.2% to 5.1%.
- Even if the September US NFP number is off of its summer highs, the US economy has made enough improvement in recent months to require less significant jobs growth before the US reaches ‘full employment’ as experienced pre-pandemic.
- Will another strong US jobs report help lock-in a Fed taper announcement in November? We’ll discuss these questions and more in context of the September US nonfarm payrolls report starting at 8:15 EDT/12:15 GMT. You can join live by watching the stream at the top of this note.
Focus Returns to US Labor Market
The prime focus for the US Dollar when it comes to the September US Nonfarm Payrolls report is whether or not the US labor market regained its momentum after a surprisingly weak August reading that came in at +235K (versus expectations closer to +650K).
According to a Bloomberg News survey, forecasters are looking for jobs growth of +488K while the unemployment rate (U3) is anticipated to drop from 5.2% to 5.1%. Meanwhile, the US labor force participation rate is due in at a still-meager 61.7%.
The September ADP employment change report, which was released on Wednesday and came in at +568K, will likely bias expectations higher ahead of the official release this morning.
Atlanta Fed Jobs Growth Calculator (September 2021) (Chart )
Even if the September US NFP number is off of its summer highs, the US economy has made enough improvement in recent months to require less significant jobs growth before the US reaches ‘full employment’ as experienced pre-pandemic.
According to the Atlanta Fed Jobs Growth Calculator, the US economy needs +435K jobs growth per month over the next 12-months in order to return to the pre-pandemic US labor market of a 3.5% unemployment rate (U3) with a 63.4% labor force participation rate.
Put simply, if the September US NFP meets expectations, it will be a strong indication that the Federal Reserve will feel comfortable announcing a taper to its asset purchase program when it meets next in November.
We’ll discuss these questions and more in context of the September US nonfarm payrolls report starting at 8:15 EDT/12:15 GMT. You can join live by watching the stream at the top of this note.
— Written by Christopher Vecchio, CFA, Senior Strategist
Read More: Live Data Coverage: September US NFP