The Non-Farm Payrolls (NFP) report is one of the most closely watched indicators of U.S. economic health.
It measures the number of jobs added in the U.S. economy, excluding the farming sector, government, private households, and non-profit organizations.
For this upcoming release, the market expects 163,000 new jobs to have been added in August.
Unemployment Rate: Often paired with this release, expected to remain steady or slightly change.
Wage Growth: Another key component to watch, with expectations for a moderate increase of 0.3%.
Potential Market Impacts
U.S. Dollar (USD):
Above 163,000: A stronger-than-expected NFP would suggest a robust labor market, potentially leading to a stronger USD as it supports the case for the Federal Reserve to lean towards slower, smaller or less frequent rate cuts.
Below 163,000: A weaker result could lead to a softer USD, especially if it signals slowing economic growth, which might prompt expectations of more dovish Fed policy and larger or more frequent rate cuts in the months ahead.
Gold:
Above 163,000: A strong NFP could pressure gold prices lower, as a stronger dollar and higher interest rates typically reduce the appeal of non-yielding assets like gold.
Below 163,000: If the NFP disappoints, gold might see a boost as investors flock to safe-haven assets, anticipating a weaker dollar and potential monetary easing.
U.S. Stock Markets:
Above 163,000: Stocks could rise if the number is strong, suggesting economic resilience. However, if it raises concerns about rate cuts, it could limit gains or even lead to a sell-off.
Below 163,000: Stocks might initially fall on worries of economic slowdown, but if weaker data leads to greater expectations of Fed easing, markets could recover or even rally on those hopes.
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