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After the latest from the Fed’s policy outlook, there is a renewed focus on employment figures from the US.

Expectations are for jobs to be the guiding light of monetary policy, and therefore the dollar, for at least the next year.

Stock markets also largely depend on cash injections from the Fed.

Given the difficulties in compiling data because of COVID, we might have increased volatility in the markets in reaction to NFP.

What We Are Expecting

Expectations are for headline NFP to slow their pace of growth to 1.4M net new jobs created during August. This is in comparison to 1.76m in the prior month.

From the pandemic, 21.2M jobs were lost. And, since then, a net of around 9.0m has been created.

That means in the three months of “recovery”, only about 42.5% of jobs have come back. If expectations are met, then we still won’t reach 50% of job recovery.

Expectations are for the unemployment rate to drop down to 9.8% from 10.2% prior. A far cry from sub-structural ...

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