Recent US job data are leaning toward fragile labor market conditions as businesses have become more cautious about hiring activities amid the uncertainty in geopolitical, internal political, and tariff risks.
Economic indicator vice, This is evidenced by weaker ADP employment changes, lower job openings, rising jobless claims, and even both ISM manufacturing and non-manufacturing employment levels also dropping below the benchmark of 50, which indicates an increase in layoffs and slower hiring activities in both sectors.
The Federal Reserve’s POV side, several Federal Reserve members are hinting at the increasing weakness expectation coming to the job data, with some projecting to see a rise in the jobless rate to around 4.5% next year. Meanwhile, the FED’s Beige Book also highlighted sluggish labor market conditions.
→ all weakness signs for soft labor prints.
With that, the market now prices in more than 90% on a rate cut while leaving the other two rate cuts in October and December. Therefore, the market is now awaiting tonight’s data.
Tonight’s Data Projection
So with some downward projection in tonight’s US job data, Nonfarm Payroll is expected to slowly rise to 75K (still below 100K), the unemployment rate to rise to 4.3%, and wage growth annually to stay the same, all suggesting a higher expectation of seeing some more softening.
So the question here is whether this comes as anticipated or what?
And if all of which really come as expected or even lower → the fragility of the job market will be confirmed, and the Dovish FED fund rate → will likely weaken the USD while strengthening the GOLD price.
But if this comes stronger → contradicts with other recent job data → the FED may consider a rate cut in the next meeting, albeit the September is coming very highly as anticipated. This also means that this data will signal a hawkish rate cut. → USD may become stronger and will put some downward pressure on the GOLD price.
