Poll: What will be the outcome of Friday’s US jobs report?

The latest U.S. nonfarm payrolls report, set to be released on Friday, is anticipated to be a focal point on the economic calendar this week.

Economists predict that the U.S. economy will add 144,000 jobs in September, a slight increase from the previous month’s addition of 142,000. The unemployment rate is expected to remain steady at 4.2%, the same level recorded in August.

In August, payrolls experienced a revision from a significantly downgraded figure of 89,000, which fell short of expectations that had projected an increase of 164,000. During that same period, the jobless rate decreased from 4.3%. Collectively, these figures indicated a slowdown in labor demand, a trend that has been noted by several officials at the Federal Reserve as a key factor behind their decision last month to implement a substantial 50-basis point interest rate cut.

Analysts at ING noted in a recent report that the jobs market is crucial to determining the pace of any future interest rate cuts, especially as inflation, which had previously dominated discussions surrounding aggressive Fed rate hikes, shows signs of easing.

“If we see the unemployment rate rise back to 4.3% next Friday and payrolls come in below 75,000, expect calls for a second 50-basis point rate cut to increase significantly,” the analysts stated.

Federal Reserve Chair Jerome Powell indicated earlier this week that the central bank is likely to pursue more conventional quarter-point interest rate cuts moving forward, while emphasizing that the trajectory of borrowing costs is not predetermined.

Powell mentioned that the Federal Open Market Committee is not in a rush to quickly cut rates, even after their notable reduction during the meeting on September 17-18. He defended this course of action, asserting that it demonstrated the FOMC’s “growing confidence” that a suitable adjustment in policy could sustain strength in the labor market amid moderate economic growth and a sustainable return to a 2% inflation rate.

On Tuesday, it was reported that U.S. job openings unexpectedly increased slightly in August, which may suggest some resilience in labor demand as it cools in the third quarter.

The Job Openings and Labor Turnover Survey indicated that available positions, serving as a proxy for labor demand, rose to 8.040 million on the last business day of August, up from a revised figure of 7.711 million in July. Economists had predicted that the JOLTS report would slightly decline to 7.640 million.

In July, job openings fell to their lowest level in three and a half years, interpreted as a potential indication that the U.S. jobs market was cooling off, albeit in a controlled manner.

What are your predictions for the nonfarm payrolls number in September? How do you anticipate markets will respond to the report? Share your thoughts in the accompanying poll.