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Event Guide: U.S. Non-Farm Payrolls Report for August 2023

This upcoming NFP release might make or break September rate hike expectations!

What are market analysts expecting? And how might USD pairs react?

Here’s what to know when trading the U.S. employment report for August.

Event in Focus:

U.S. Monthly Employment Situation Summary from the U.S. government for August 2023

When Will it Be Released:

September 1, Friday: 12:30 pm GMT

Use our Forex Market Hours tool to convert GMT to your local time zone.


  • U.S. Non-Farm Payrolls Change m/m: +180K forecast vs. +187K previous
  • U.S. Average Hourly Earnings m/m: +0.3% m/m forecast vs. 0.4% m/m previous
  • U.S. Unemployment Rate: 3.5% forecast vs. 3.5% previous

(as forecasted at 3:05 pm GMT on Aug. 30) 

After coming in short of market estimates in July, the August NFP reading is projected to show another slowdown in hiring with a net addition of 169K in jobs.

Still, this should be enough to keep the unemployment rate steady at 3.5% for the month.

Wage growth, which came in stronger than expected in July, is also expected to tick lower. The average earnings index is estimated to ease from the earlier 0.4% increase to a 0.3% uptick this time.

Relevant U.S. Data Since the Last U.S. Non-Farm Payrolls Report:

Arguments for Weak Jobs Update / Bearish USD

  • JOLTS job openings slowed from the downgraded 9.17 million in June to 8.83 million in July, lower than the estimated 9.49 million in job opportunities
  • CB consumer confidence index fell from downgraded 114.0 to 106.1 in August instead of improving to the projected 116.0 figure, as “Assessments of the present situation dipped in August on receding optimism around employment conditions: fewer consumers said jobs are “plentiful” and more said jobs are “hard to get.”
  • S&P Global flash composite PMI for July showed that “weak demand and lower new orders resulted in job shedding at some firms, with mounting wage costs compounding decisions to cut staff.”
  • ADP U.S. Private Payrolls Change for August came in weaker at +177K (210K forecast). July was revised higher to 371K

*Note: ISM PMIs, and Challenger job cuts figures have yet to be released as of this writing.

Previous Releases and Risk Environment Influence on USD

August 4, 2023

Action / results: 

The U.S. Non-Farm Payrolls figure for July fell short of estimates at 187K versus the 190K forecast, but the unemployment rate managed to dip from 3.6% to 3.5% instead of holding steady.

Wage growth was also slightly stronger than expected, as the average hourly earnings figure saw another 0.4% uptick.

After a weak start on Monday, the dollar was able to get back on its feet when the Fed hinted at keeping rates “higher for longer.” The U.S. credit rating downgrade by Fitch midweek caused a bit of retreat, but the safe-haven currency managed to stay afloat.

The dollar gave back a few more gains upon seeing downbeat NFP results, but this wasn’t enough to dethrone the currency from the top spot for the week.

Risk environment and intermarket behaviors: 

Risk appetite stemming from Chinese stimulus rumors weighed on safe-havens like the dollar and yen early in the week, but downbeat PMI readings from the Asian giant revived risk-off flows midweek.

A combination of higher U.S. Treasury yields and a credit rating downgrade by Fitch shored up risk aversion later on, weighing on equities and commodities while propping up the lower-yielding dollar leading up to the NFP release.

July 7, 2023

Action / results: 

The June employment figure fell short of estimates, as Uncle Sam added 209K jobs for the month instead of the estimated 224K increase.

To top it off, the May figure was downgraded to show a smaller 306K gain in hiring from the initially reported 339K increase.

Even so, the jobless rate was able to improve from 3.7% to 3.6% thanks to improvements in labor force participation. Also, the average hourly earnings index beat expectations with a 0.4% uptick while the previous reading enjoyed an upgrade to 0.4% as well.

Not surprisingly, these weak headline figures were enough to erase some gains that the dollar had been racking up throughout the week. After all, this marked the end of the NFP’s stronger-than-expected steak and likely reminded market watchers of the FOMC minutes that suggested a slower pace of tightening soon.

Risk environment and intermarket behaviors: 

The dollar was off to a shaky start during this trading week, as it still felt the jitters from Friday’s weak core PCE price index. Still, it managed to keep its head afloat thanks to concerns about high borrowing costs spurring a possible global recession.

Weak PMI readings from China and the U.S. also kept market players on edge, along with the FOMC minutes that triggered a flight to safety on Wednesday. It wasn’t until the NFP figures were printed on Friday that risk assets like commodities and equities regained some footing.

Price action probabilities

Risk sentiment probabilities:

Risk sentiment influences are mixed this week as the major asset classes seem to be driven more by asset specific narratives, including a potential interest rate hike cycle peak putting pressure on USD and bond yields (while lifting equities), recession fears driving gold higher, OPEC production cuts lifting oil prices, and Grayscale’s court victory over the SEC lifting crypto.

If we were to lean one way or the the other though, we’d say traders may be quick to go risk-off as economic data continues to disappoint, a narrative that will likely grow with China’s upcoming Manufacturing and Services PMI data if that disappoints.

That may be the biggest driver of broad risk sentiment until the Friday NFP release, unless we see a big surprise read from the core PCE Price Index number from the U.S. on Thursday. At the moment it’s forecast to come inline with the June read of 0.3% m/m, which is not likely to spark volatility at this point.

And lately, U.S. weekly initial jobless claims have been able to spark volatility and influence risk sentiment short-term, so keep an eye on those numbers and market reaction to help get a gauge on risk flows going into Friday.

USD scenarios

Base Case:

Leading jobs indicators are mostly pointing to another weak NFP print, although it’s also worth noting that the ISM business surveys are yet to be released.

Also, don’t forget that a BLS report came out suggesting that U.S. employment data is likely 306K lower through March than previously estimated, thanks to downgrades to transportation and warehousing payrolls.

With that, there’s a strong possibility that the headline figure could disappoint AND that previous months might see significant negative revisions. This could seal the deal for a September pause and even dash hopes for future FOMC hikes.

If this is the case and the Greenback hasn’t already significantly fallen in anticipation to this outcome, watch out for a sharp dollar selloff against higher-yielding currencies like AUD, NZD, and CAD since the rising possibility of the Fed sitting on its hands could spur a big risk rally, mainly in equities.

If the USD has already fallen ahead of the NFP release, then be more cautious with your risk management as this scenario drives up the probability of a “buy-the-rumor, sell-the-news” market reaction to the already expected weak U.S. employment update.

Alternative Scenario:

If the August headline NFP reading manages to beat market estimates, this would once again highlight the persistent strength of the labor market and remind traders of Powell’s remarks that “restrictive monetary policy” is required.

This scenario could bolster September tightening bets, especially if the U.S. preliminary GDP sees a positive revision and/or the core PCE price index beats consensus.

In this case, stay on the lookout for another USD leg higher against riskier currencies like the comdolls or against currencies with dovish central banks like EUR and AUD, with higher probability of success if USD fell significantly ahead of the Friday’s employment update.

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