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NFP Preview - Jobs at “stall speed,” asymmetric risk into Friday

4 September 2025, 11:36

We’ve all seen USD trading nervously ahead of the payrolls, with equities chopping inside tight ranges.

On the surface, it looks like a routine pre-event pause. Under the hood, hiring has slowed to stall speed, recent revisions have turned materially negative, and policy expectations are highly sensitive to any downside surprise, according to Reuters.

US30 - Renko 50p Pre-NFP Map

Macro background: why this print matters now

Consensus for August nonfarm payrolls sits near +75k, unemployment 4.3%, and average hourly earnings +0.3% m/m. That’s a soft pace by historical standards and keeps the debate on the Fed’s path to easing.

The July report added just 73k jobs and delivered about –258k in downward revisions to May–June—one of the largest two-month markdowns outside the pandemic period. Markets read this as confirmation that hiring momentum has faded.

Labor demand is cooling as well: JOLTS openings fell to roughly 7.18 million in July, reinforcing the “softer jobs” narrative into Friday.

A quick note on ADP (due today): useful color, but historically a poor predictor of the BLS payrolls—good for sector tone, not for the headline call.

Policy angle. With growth and jobs softening, markets broadly expect the Fed to start cutting in September; only an unusually strong print would challenge that tilt. Recent communication has acknowledged the cooling backdrop and the risk that earlier gains were overstated before benchmark revisions.

The three paths (and what tends to move)

1) Hot surprise — ≥120k or AHE ≥0.4% m/m; UR ≤4.2%
USD pops, front-end yields jump, gold dips; equities wobble on “fewer cuts” repricing.
Narrative: Labor not as weak as feared; September cut still likely but path shallower.

2) In-line — ~75k, AHE ~0.3% m/m, UR ~4.3%
First move fades; positioning dominates. USD/yields little changed; gold range-bound.
Narrative: Stall speed confirmed; focus turns to revisions, participation, and hours.

3) Cool / downside — ≤30–50k and/or UR up to 4.4%+; weak revisions
USD lower, yields down, gold bid; equities initially cheer on cuts, then refocus on growth.
Narrative: Labor slack building; easings priced more firmly.
These thresholds reflect how desks typically map the data into policy odds given current consensus and the July backdrop.

What I’ll actually watch in the release (beyond the headline)

Revisions (last two months): another negative adjustment would amplify the “stall” message.
Participation rate & average weekly hours: small moves here can swing labor income more than the headline.
Private vs government payrolls: recent weakness has clustered in interest-sensitive and white-collar pockets; check diffusion.

Trading setups (tactical)

Bearish USD / risk-on (cool print): fade initial spikes against pre-release box breaks that fail; look for continuation into the next weekly pivot on US30 and a push higher in XAUUSD.
USD resilience / risk-off (hot print): be ready for a swift return to the box/mid-range on US30 if the first breakout stalls; gold pullbacks toward support likely stay shallow unless wages surprise to the upside.

Release cheat-sheet

When: Fri Sep 5, 08:30 ET / 14:30 CEST.
Consensus: NFP ~+75k, UR 4.3%, AHE +0.3% m/m.
Why it matters: July’s 73k plus heavy downward revisions and falling job openings set a low bar—asymmetry favors downside in USD/yields if the report disappoints.