September Non-Farm Payrolls Preview: Key Numbers

Here are the anticipated figures:

• The consensus forecast stands at +910K, with estimates ranging from +35K to +180K.
• August saw a gain of +162K.
• July added +21K.
• The private-sector consensus is pegged at +85K.
• The unemployment rate is expected to hold at 4.1%, unchanged from the prior reading.
• The participation rate was previously 61.6%.
• The underemployment rate (U6) stood at 7.7% last time.
• Average hourly earnings are seen rising 3.2% year-over-year, up from 3.1% previously.
• On a month-over-month basis, average hourly earnings are expected to increase by 0.3%, matching the prior pace.
• Average weekly hours are forecast at 34.3, down from 34.4 previously.

Early reads on September employment:

• The ADP employment report came in at +90K, above the +75K expected and the +36K prior.
• The ISM services employment figure has not yet been published.
• ISM manufacturing employment stood at 52.7, versus expectations of 52.0 and the prior 52.8.
• Challenger reported 43,281 job cuts, down from 52,881 previously.
• Philly Fed's employment index was +11.8, compared to +27.9 last month.
• The Empire State employment index came in at +10.6, up from +9.3 prior.
• Initial jobless claims in the survey week totaled 196K, versus 206K in the prior month.
• Revelio Labs data showed a gain of +57K, after +41K previously.

BMO notes that September payrolls are typically seasonally soft, with the headline figure undershooting estimates 64% of the time and exceeding them 36% of the time, by 92K and 65K on average. However, the firm points out that September NFP has beaten expectations for the past four years. On the unemployment rate, 57% of previous September prints have come in below consensus, 18% above, and 25% matched. Taken together, the seasonal bias is slightly hawkish, though September is notoriously difficult to adjust for seasonality.

Market pricing ahead of the release implies a 30% probability of a rate hike at the October 28 meeting. That probability has fallen sharply over the past week, driven by dovish remarks from the Fed's Williams and a softer PCE report. Non-farm payrolls could shift the outlook once more, and given the data-dependent Fed, another large market move is possible.

The risks appear balanced: a soft number would reduce the urgency for a hike, while a strong reading would revive the October debate — but unless accompanied by a strong wage figure, it would not be a game-changer. At present, the market is highly attuned to economic data, so substantial moves in either direction are likely.