On Friday, 3 October 2025 (13:30 UK), the U.S. Bureau of Labor Statistics will release the September Employment Situation, headline Nonfarm Payrolls, unemployment rate, and average hourly earnings, a market-moving read on labor-market health that shapes views on growth momentum, inflation pressures, and the path of Federal Reserve policy.
Our central call is for September nonfarm payrolls around +10k (range: –25k to +25k), well below the 50k consensus, with private payrolls flat-to-slightly negative, the unemployment rate near 4.3%, and average hourly earnings up 0.2 – 0.3% m/m (3.6 – 3.7% y/y).
The forecast leans on a broad cooling across high-frequency hiring signals (ADP, JOLTS, claims trend), contractionary survey employment indices, and an ongoing bias toward negative revisions. The piece that follows translates these inputs into sector-level expectations, a scenario map with market implications, and a practical trading framework for FX and rates around the release.
Our Call:
Nonfarm payrolls (Sep): +10k (range: –25k to +25k), i.e., below the 50k consensus and with downside risk skewed to flat/negative.
Private payrolls: roughly flat to slightly negative.
Fresh high-frequency reads have softened materially.ADP’s September print showed–32k private jobs (largest drop since 2023) and August was revised down to –3k — not a one-to-one guide to NFP, but directionally bad and notable this month. Wage growth in ADP also cooled to 4.5% y/y, consistent with softer AHE.
Labor demand is stagnating.JOLTS (Aug): openings up only +19k to 7.23m while hires fell –114k, openings/unemployed slipped to 0.98; quits at an 8-month low (1.9%). That’s classic late-cycle cooling.
Hard data on layoffs aren’t spiking, but hiring indicators are weak.Initial claims eased to 218k into the survey window (week ended Sep 20), but continuing claims ~1.93m remain elevated — a mix that says firms are holding on to workers yet not adding much.
Survey employment indices signal contraction.ISM manufacturing employment rose to 45.3 in Sep (still contractionary, 8th straight month <50). Manufacturing payrolls likely subtract. Services PMIs (flash) point to slower growth and softer hiring momentum.
Sentiment corroborates slack.The Conference Board’s“jobs plentiful” share fell to 26.9% in Sep, lowest since early 2021, implying looser conditions ahead.
Context matters:BLS’s preliminary benchmark indicates –911k jobs over the year through March (finalized later), underscoring that underlying job creation was over-stated and momentum is weaker than previously thought. Even if not fully reflected Friday, it colors revision risk. Bureau of Labor Statistics
What We Expect Inside the Report
Sector mix
Health care / state & local education: modest gains (health care resilience; school-year hiring shows up NSA but SA nets to small).
Manufacturing: likely negative (ISM employment deep sub-50).
Construction / trade / transport: soft/flat (JOLTS showed hiring drop, plus higher rates/tariffs uncertainty).
Leisure & hospitality / prof. & business services: weak—ADP showed losses there. Government net: roughly flat.
Earnings & hours
AHE: drift lower in y/y; monthly +0.2–0.3% feels right given ADP pay cooling (4.5% job-stayers). Workweek steady. This keeps real wage growth modest but limits upside inflation risk from wages.
Revisions risk
Small negative net revisions to Jul/Aug would fit the recent pattern and the broader benchmark signal (bias lower), another reason to shade below consensus.
Shutdown note
If a federal shutdown interrupts publication, the survey reference week (Sep 7–13) is unaffected; the analysis still applies once released. (Labor Dept. has warned the release could be delayed if the shutdown proceeds.)
(Keep in mind BLS sampling error +83k on headline payrolls; at this stage even a 50k consensus print is within “noise.”)
How to Position:
Bias: Position for a soft/flat headline and benign wages. I’d lean tactically USD-bearish into/after the print unless Challenger cuts (Thu) and claims (Thu) surprise strong. Watch especially USDJPY (sensitive to front-end yields) and EURUSD for a squeeze if sub-consensus.
What can flip the script: A private-sector upside surprise >75k with 0.4% AHE m/m and positive revisions — that likely re-prices Fed cut odds and supports USD.
Key “tells” to watch before Friday
Challenger job cuts (Thu 02 Oct): A big jump would reinforce our weak NFP case; a benign print would trim the downside tail.
Initial & continuing claims (Thu 02 Oct): Claims around or below 218k and continuing near 1.93m are consistent with stall-speed hiring, not a collapse. A sudden uptick would add downside risk to NFP.
ISM Services (Fri, later): If services employment lands <50, that adds weight to a softer labor narrative into next month.
Conclusion
Taken together, the incoming data argue for a stall-speed payroll print with benign wages, a combination that should tilt initial market reaction toward softer front-end yields and a weaker USD, most cleanly expressed via USDJPY lower and EURUSD/GBPUSD higher, unless wages surprise hot (>0.4% m/m) alongside a >75k private-sector gain and positive revisions.
Before the release, we’ll watch Challenger job cuts and jobless claims for confirmation (or challenge) to the downside bias, and take note of ISM services employment for the next month’s setup. With headline sampling error still large and revisions risk skewed lower, the balance of probabilities favors sub-consensus NFP, but the asymmetry is clear: the bigger USD move likely comes on a weaker print, while a modest beat merely tempers easing expectations.
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Dan Patrick
Dan Patrick is the founder and lead analyst at TerraBullMarkets, publishing high-conviction, “A+ only” FX trade setups and concise London-session macro briefings. Views are his own; this is not investment advice.
Dan Patrick
Dan Patrick is the founder and lead analyst at TerraBullMarkets, publishing high-conviction, “A+ only” FX trade setups and concise London-session macro briefings. Views are his own; this is not investment advice.