What can investors expect from looming NFP data?

As on the first Friday of every month, investors await the fresh NFP figures, The US economy is expected to add 140K jobs in September, following a 142K expansion the previous month. The Unemployment Rate is expected to remain steady at 4.2% during the same period. Average Hourly Earnings is expected to increase 3.8% for the second month, and signs of a resilient labor market may encourage the Federal Reserve to further combat inflation. A positive development may generate a bullish reaction in the US Dollar as it curbs speculation for another 50bp Fed rate cut. However, a weaker-than-expected NFP report may produce headwinds for the Greenback as the Federal Open Market Committee (FOMC) starts to unwind its restrictive policy.

The median estimate for total nonfarm payroll employment for September 2024 is 140,000, which is slightly below the trailing 12-month average of 196,500. In August, total nonfarm payroll employment increased by 142,000 compared to the median estimate of 160,000. Over the past 12 months, the total nonfarm payroll employment number has surpassed the median estimate in 7 months and fallen short of the median estimate in 5 months. The actual number has exceeded the estimate by 9.6% on average during this time. Over the past 5 years, the total nonfarm payroll employment number has surpassed the median estimate 67% of the time and fallen short of the median estimate 33% of the time.

The U.S. Bureau of Labor Statistics (BLS) will release the total nonfarm payroll employment number and the unemployment rate for September on October 4. Nonfarm payrolls in the US are forecast to increase by 140,000 in September. Gold is likely to react stronger to a disappointing jobs report than an upbeat one, with the gold price’s inverse-correlation with the NFP surprise weakening slightly by the fourth hour after the release.

A study analyzing the XAU/USD pair’s reaction to the previous 35 NFP prints revealed that the US economy added 142K jobs in August versus forecasts for a 160K print, while Average Hourly Earnings climbed to 3.8% from 3.6% during the same period. The Unemployment Rate narrowed to 4.2% from 4.3% in July, with job gains occurring in construction and healthcare.