PREVIEW: US September jobs data is due on 2nd October 2026 at 13:30BST/08:30EDT

SUMMARY: The US economy is expected to add 98k nonfarm payrolls in September. Analysts note that the August data, where 162k payroll additions were reported, may have been subject to favourable seasonal adjustments, and will be watching to see if the data is revised lower in September. The unemployment rate is expected to hold at 4.1%, an expectation supported by the Chicago Fed’s flash real-time unemployment rate forecast. Average hourly earnings are seen rising 0.3% M/M, matching the August rise. Labour market proxies have been positive in September: initial and continuing claims both fell between the survey windows, and ADP’s private payrolls beat expectations. Revelio’s data also points to a pick-up in hiring, while Challenger reported the lowest September job-cut total since 2022, alongside a rise in hiring plans. Business surveys have also been constructive: S&P Global’s surveys showed employment rising at the fastest pace since June 2022 across both manufacturing and services, while the ISM manufacturing employment rose further into expansion. In contrast, consumer confidence data showed the labour market differential narrowing, with expectations for jobs six months ahead deteriorating further. In terms of Fed policy, officials have broadly described the labour market as stable and close to full employment, keeping their focus firmly on the inflation side of the mandate, with several signalling that further hikes may be needed. EXPECTATIONS: Headline nonfarm payrolls are expected to rise +98K in September (prev. 162k in August; 3-month average rate is 71K, 6-month average 107K, 12-month average 50K), with private payrolls seen rising by +85K (prev. 127K). Many analysts have argued that the upside surprise last month was buoyed by generous seasonal adjustments, and accordingly, there could be a correction in the September report. The unemployment rate is expected to be unchanged at 4.1%; note that at the September FOMC meeting, participants lowered their end-2026 jobless rate view to 4.1% from 4.3%, and continue to see unemployment at this level next year. Meanwhile, the Chicago Fed’s final real-time unemployment rate forecast for September was little changed at 4.10% (vs the final 4.14% in August). Some have noted that risks tilted towards a small decline in the jobless rate given continuing claims have fallen. Average hourly earnings are seen rising 0.3% M/M (prev. 0.3%), while the annual rate is expected to tick up to 3.2% Y/Y (prev. 3.1%). Some analysts suggest that a calendar quirk might cap average hourly earnings. The average workweek is expected to ease a touch to 34.3 hours (from 34.4). JOBLESS CLAIMS: Weekly initial jobless claims have remained low, printing 198k in the reference period that coincides with the BLS survey week (vs 207k into the August window), while continuing claims also moved lower between the two reference periods to 1.719mln (vs 1.771mln). Analysts at Barclays, however, say that while their usual claims-based models point to strong gains, alternative indicators suggest more modest growth, noting that seasonal adjustments are the key risk. The bank writes that using August 2025 factors, August payrolls would have shown a 74k fall rather than a 162k rise, and it expects the August data to be revised down, which it says would raise upside risks to the September figure; little revisions would point to a September print below 50k. ADP: ADP’s gauge of private employment topped expectations in September, printing 90K (exp. 70K, prev. 38K). The report stated that hiring accelerated for the first time since May, led by education and health care and leisure and hospitality; financial activities and professional and business services showed weakness, however. The pay metrics noted that the median change in annual pay for job stayers was unchanged at 4.4% Y/Y, and was also unchanged for job changers at 7.3% Y/Y. REVELIO: Revelio’s Public Labor Statistics reported that the economy added 56.9K jobs in September, picking up in pace vs August’s revised-up 40.6k. The gain was driven by significant job gains in the Public Administration, Health Care and Social Assistance, and Construction sectors. CHALLENGER JOB CUTS: US employers announced 43,281 job cuts in September (-18% M/M, and -20% Y/Y), the lowest September total since 2022. Year-to-date cuts of 573,195 were down 39%, while Q3 cuts of 129,591 were down 43% vs Q2. Technology led the job cuts in September with 10,799; AI remained the leading reason. Elsewhere, hiring plans rose to 90,787 in September amid muted seasonal hiring, but are still down 23% Y/Y, and the lowest September since 2011; YTD plans of 210,612 were up 3%. The firm cited high energy costs, war in Iran, rate hikes and likely surging healthcare costs. BUSINESS SURVEYS: S&P Global’s flash PMI report for September noted that labour market conditions strengthened markedly. At the composite level, employment rose at the fastest rate since June 2022, a pace rarely exceeded since comparable data began in 2009. Firms hired to tackle backlogs of work, which grew at the sharpest rate since May 2022. In the services sector, payrolls increased at the quickest pace since June 2022. Manufacturing jobs growth was the strongest since February 2021, and employment was one of the five components that lifted the headline Manufacturing PMI. However, companies also reported growing difficulty finding suitable staff. Wage pressures were also cited as having picked up in many cases, adding to higher fuel and transport costs. Meanwhile, the ISM manufacturing employment sub-index rose 1.5 points in September to 52.7; ISM noted that the positive-to-negative comments ratio on employment was 1.5-to-1 in the month. Eight of 18 manufacturing industries reported employment growth, led by Electrical Equipment, Appliances & Components, while six reported decreases, led by Textile Mills. The ISM services index will not be released until after the September jobs report. CONSUMER CONFIDENCE: The Conference Board’s gauge of consumer confidence saw views of the labour market softening in September. The share saying jobs were “plentiful” slipped to 23.6 (from 24.5), while those saying jobs were “hard to get” rose to 21.9 (from 20.3); that narrowed the labour market differential by 2.5 points to just +1.7. Meanwhile, the outlook worsened further: 28.4 expected fewer jobs over the next six months (vs 26.1 previously), while 14.0 expected more (vs prev. 14.8); net expectations fell 3.1 points to -14.4. Regarding pay metrics, consumers still expect household incomes to rise ahead, but less so, with net expectations down 3.0 points to +2.5. FED POLICY: Since the September FOMC meeting, Fed officials have broadly described the labour market as stable and close to full employment; Barr, Collins and Williams said risks to employment have receded, while Goolsbee said business contacts were seeing tighter conditions. Barkin was more cautious, noting slow job growth and a market that is not particularly tight. Musalem continues to argue that the labour market is not a source of inflation pressure. Policymakers’ focus is firmly on the inflation side of the mandate, which officials describe as persistent, broad-based and increasingly demand-driven. Policymakers like Barr, Musalem and Paulson have signalled further hikes may be needed; Williams sees another hike by year-end as reasonable, and Collins has also pencilled in one more this year. Money market pricing has moved dovishly in recent sessions, with Williams mentioning he sees no need for urgency following the September rate hike, while the August PCE report was softer than expected. Pricing for an October hike has moved to around 34%, down from roughly 70% last week - this data will help shape expectations further, and we will see another CPI and PPI report before the October 28th FOMC meeting, but the September PCE is due to be released on September 29th. Money market pricing has moved more dovish in recent sessions, with Williams mentioning he sees no need for urgency following the September rate hike, while the August PCE report was softer than expected. Pricing for an October hike has moved to around 34%, down from roughly 70% last week; this data will help shape expectations further, and we will see another CPI and PPI report before the October 28th FOMC meeting, but the September PCE is due to be released on September 29th.