The ranges of estimates are important in terms of market reaction because when the actual data deviates from expectations, it creates a surprise effect. Another important input in the market’s reaction is the distribution of forecasts.

Although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range — so even if the data comes in inside the range of estimates but on the lower bound, it can still create a surprise effect.

Non-Farm Payrolls

  • 10K to 140K range of estimates
  • 70K–80K range most clustered
  • 80K consensus

Unemployment Rate

  • 4.3% (43%)
  • 4.2% (56%) — consensus
  • 4.1% (1%)

Average Hourly Earnings Y/Y

  • 3.6% (9%)
  • 3.5% (82%) — consensus
  • 3.4% (9%)

Average Hourly Earnings M/M

  • 0.3% (89%) — consensus
  • 0.2% (11%)

Although the NFP report is generally one of the most market-moving economic releases, the US CPI report due next week may carry more weight, as the Fed remains focused on inflation. Policymakers have repeatedly stated that the labour market is stable and is not a source of inflationary pressure.

That view is supported by the steady easing of wage growth since 2022, with earnings now hovering around pre-COVID levels. As a result, average hourly earnings deserve closer attention than the headline employment numbers in this release.