US NFP Prep (September 5th)
Release Ranges August Data:
US Nonfarm Payrolls Forecast: 73K | Prior: 75K | Range: 144K / 0K
US Unemployment Rate Forecast: 4.3% | Prior: 4.2% | Range: 4.4% / 4.1%
Average Earnings YoY – Forecast: 3.8% | Prior: 3.9% | Range: 3.9% / 3.6%
US Private Payrolls Forecast: 75K | Prior: 83K Range: 126K / 35K
Investment Bank Views
MUFG
A 25 BPS Fed cut is nearly fully priced in (+22 BPS) ahead of the September FOMC, with over 125 BPS of cuts priced by Sept 2026. The August NFP report on Friday will be key: the consensus is 75k versus 73k in July; a stronger report could reduce cut expectations, while a weak one could increase the odds of a 50 BPS cut.
Société Générale
The question whether to lock in funding levels in dollars now, or wait until after Friday 5th (NFP), Thursday 11th (CPI) or Wednesday 17th (FOMC) deserves careful consideration given the potential for discounted levels (US 10s below 4.18%) if employment disappoints and investors mark up the probability of three cuts by year end. This is not our base case but Waller won’t be the only dove to mull a jumbo reduction into two weeks if payrolls surprise to the downside on Friday. The outcome of the data should exert greater influence on 2y out to 5y debt where the potential to rally around 20bp (one additional cut) towards the April lows close to 3.40% cannot be dismissed out of hand. An upside surprise – continuing jobless claims dipped to 1.954mn during payrolls week, does not point to a disastrous NFP outturn on Friday.
Nomura
We expect headline nonfarm payrolls (NFP) likely grew 85k in August. Historical patterns suggest payrolls could be revised higher modestly for July. Private job gains likely remained slow at 80k following a 83k increase in July. Government employment likely rebounded following a negative print in July.
We forecast the unemployment rate, which has been emphasized by policymakers as a reliable measure to gauge labor market strength, likely ticked up by one-tenth to 4.3% in August. Average hourly earnings (AHE) growth likely just rounded down to 0.3% m-o-m. Risks are skewed towards a higher print due to a positive calendar effect in August. The labor market is losing momentum, and shifting balance of risks to the Fed’s dual mandate is likely to lead to a 25bp cut at the September meeting. Contained layoffs and few signs of acute labor market stress are likely to limit aggressive easing though.
Morgan Stanley
Our forecasts of a 70k rise in payrolls and 80k rise in private payrolls are very similar to July payrolls: a slowing from earlier in the year, but not the sharp deceleration that June and May now show. The unemployment rate last month was 4.2% but right on the cusp of 4.3%. We think it sticks at 4.2%: breakevens have been falling; and we expect some further downward pressure on participation rates. Average hourly earnings rise on trend, and we expect no change in the workweek.
Citi
The report is critical for the September FOMC and should solidify a 25 BPS cut. Our economists expect 45k payrolls added and the u/e rate rising to 4.3%, with upside risks.
Previous Release
US Nonfarm Payrolls Actual 73k (Forecast 104k, Previous 147k, Revised 14k)
US Unemployment Rate Actual 4.2% (Forecast 4.2%, Previous 4.1%)
US Average Earnings YoY Actual 3.9% (Forecast 3.8%, Previous 3.7% ,Revision 3.8%)
