The upcoming Non-Farm Payrolls (NFP) report is set to be released tomorrow, with a consensus expectation of 110K, compared to the previous release of 139K.
While this data is typically released on the first Friday of every month, this month’s report comes on Thursday, July 3rd, due to Independence Day (July 4th), when US markets will be closed.
For those newer to trading, the NFP is one of the most market-moving data releases globally, as it offers insight into the health of the US labor market for the month that just concluded—with the Unemployment Rate also published at the same time.
The reason this data matters so much is because of the American consumption cycle, which is historically very strong. However, slowing job creation tends to reduce US consumer spending, which affects the performance of US stock indices, and consequently impacts demand for the US Dollar, in which most global assets are priced.
This creates a domino effect: a stronger or weaker US workforce can shift expectations around Federal Reserve policy—including the likelihood of interest rate hikes or cuts—which then ripples across to other central banks and currency markets.
Since the Great Financial Crisis (2008), Dollar demand has outperformed most major currencies, with US growth leading over other G7 economies, attracting significant global capital inflows. However, that dominance is beginning to fade, as Trump’s unpredictable policies and concerns over US fiscal and debt sustainability have made investors more cautious, encouraging greater international diversification.
Let’s now explore:
- Seasonal trends for July payrolls
- Recent NFP surprises and how they’ve moved markets
- What potential reactions traders might expect from this key report