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​​​​​US jobs report preview: will NFP follow ADP rise?​​​​​

Friday’s US jobs report is expected to bring another decline in the payrolls figure, but will we see the dollar rise once again after a recent pullback?

The September US jobs report released on Friday provides traders with a fresh opportunity to scrutinise the economic recovery after months of improvements that have followed the first quarter (Q1) economic collapse.

Coming at a time when we have seen a resurgence for the dollar, the jobs report will be released at 1.30pm on Friday 2 October.

Tune in to IGTV live announcement and analysis this Friday at 1.25pm UK time on the IG platform.

Will improved ADP helps lift sentiment

The September Automatic Data Processing (ADP) payrolls figure released today has seen another month of improvement, with a figure of 749,000 representing the highest amount of job creation in three months.

That rise can be specifically attributed to small and medium sized businesses, with hiring at large firms remaining largely steady. Unfortunately, markets are expecting the headline non-farm payrolls figure to move in the opposite direction, with a reading around 900,000 expected after last months 1.37 million figure seen last month.

With the monthly jobs created moving lower, there is a fear that we could soon see that path of economic improvement take a negative turn. As things stand, that steady improvement seen over recent months remains on track, with the four-month decline in continuing claims pointing towards further reductions in the unemployment rate.

Market forecasts point towards a reduction in the headline unemployment rate from 8.4% to 8.2%. However, one potential warning sign looks like it could come from the U6 unemployment rate, which also includes both workers who are no longer looking for employment, and part-time workers looking for a full-time job. With more comprehensive measure expected to rise to 15.4% from 14.2%, this month could see the first cracks appear in the recovery.

Dollar index technical analysis

Looking at the dollar index, we have seen the greenback drift lower following a bullish breakout last week. The wider downtrend remains intact, yet we have seen a clear bottoming out over the course of August and September.

The rise through 93.64 brought about a bullish signal, with the weakness we have seen since Friday's peak providing a potential buying opportunity. As such, further upside looks likely before long, with a drop below 92.75 negating that bullish outlook. Until then, a bullish turn looks like for the dollar.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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