The @Newsquawk NFP preview: Looking for 250k payroll additions (vs. 315k in August)
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The headline rate of wage growth is expected to resume cooling in September, with the consensus seeking 250k wage increases (vs. 315k in August); the unemployment rate is seen unchanged at 3.7%, and there will also be focus on the participation rate after a welcome increase in August. Wage growth is expected to continue, although the annual tax rate is expected to cool a touch.
Traders will frame the data in the context of Fed policy; hopes are building that the central bank could relent on some of its hawkishness if its policy tightening raises concerns about financial stability as it moves policy further into restrictive territory – these concerns could be exacerbated by soft economic data, as seen this week after the release of the Manufacturing ISM and JOLTs data, which fueled bets that the Fed would not be so aggressive with rates going forward.