US September Nonfarm Payrolls Preview

The US Bureau of Labor Statistics will release the September jobs report on October 8. Following a disappointing increase of 235,000 in August, investors expect Nonfarm Payrolls to rebound and rise by 488,000 in September. 

Will the US nonfarm payrolls report be the green signal for the Federal Reserve to begin its long-awaited tapering?

Over the course of three weeks, Treasury yields and the US dollar have been rising, and stocks have been falling since early September. In late August, Federal Reserve Chairman Jerome Powell indicated that the Fed was likely to reduce its $120 billion of bond purchases before the end of the year. In June and July, it was expected to add 750,000 in August.

Data released by the ADP on Wednesday showed that 568K jobs were added in the private sector during September, above market expectations of 428K. However, In his press conference following the September monetary policy decision that they do not need to see a vital jobs report before reducing asset purchases.

The Job Openings and Labor Turnover Survey (JOLTS) had almost 11 million unfilled positions in July, a record, and with August’s anemic hiring that will probably run higher in subsequent months. 

Initial jobless claims are also a warning sign that the labor market is not accelerating as expected; claims rose for 3 consecutive weeks from 312K on September 3 to 362K on September 24 but returned to 326K in the last week.