NFP Preview: Delayed September Data Could Still Tilt the Fed’s Decision

NFP Key Points
NFP report expectations: +50K jobs, +0.3% m/m earnings, unemployment at 4.3%.
Leading indicators point to a potentially above-expected reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 50-100K range
When is the September NFP Report?
The September NFP report will be released on Thursday, November 20, at 8:30 ET.
NFP Report Expectations
Traders and economists expect today’s to show that the US created 50K net new jobs, with rising 0.3% m/m (3.7% y/y) and the U3 holding steady at 4.3%.
NFP Overview
We’re back (sort of)!
After the longest government shutdown in history, the intrepid folks at the Bureau of Labor Statistics (BLS) are back at work to deliver the SEPTEMBER version of the monthly jobs report. As the table below shows, economists believe the US labor market extended its “low hire, low fire” regime in September:
Source: StoneX
With reporting still ambiguous about whether we will ever see the October jobs report (my guess is no), this could be one of the last readings we see on the labor market before the FOMC meets for the final time of the year to make a tough decision on whether to next month.
With traders currently pricing in coinflip odds of another Fed rate in December, the stage is set for a potentially volatile reaction to the release (although the December jobs report should still carry more weight as a more timely reading).
NFP Forecast
As regular readers know, we focus on four historically reliable leading indicators to help handicap each month’s NFP report, but given the government shutdown, we don’t have access to the most relevant initial jobless claims reports this month:
The subindex ticked up to 47.2 from last month’s 46.6 print.
The subindex also rose slightly to 46.0 from last month’s 45.3 reading.
The report fell by -29K jobs, down from last month’s downwardly-revised -3K reading.
Weighing the data and our internal models, the leading indicators point to a potentially above-expected reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 50-100K range, albeit with a big band of uncertainty given the limited dataset.
Regardless, the month-to-month fluctuations in this report are notoriously difficult to predict, so we wouldn’t put too much stock into any forecasts (including ours). As always, the other aspects of the release, including the closely-watched average hourly earnings figure and unemployment rate, will also impact how markets react to the release.
Potential NFP Market Reaction
Technically speaking, the is near the middle of its recent ranges against most of its major rivals, leaving a neutral balance of risks headed into the release.