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Ahead of the jobs report, the US dollar is oversold against many of its rivals, setting the stage for a potential bounce ahead of the holidays as long as NFP remains positive.
NFP Key Points
- NFP report expectations: +50K jobs, +0.3% m/m earnings, unemployment at 4.5%.
- Leading indicators point to a potentially above-expected reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 60-100K range
- Ahead of the jobs report, the US dollar is oversold against many of its rivals, setting the stage for a potential bounce ahead of the holidays as long as NFP remains positive.
When is the November NFP Report?
The November NFP report will be released on Tuesday, December 16, at 8:30 ET.
NFP Report Expectations
Traders and economists expect the NFP report to show that the US created 50K net new jobs, with average hourly earnings rising 0.3% m/m (3.7% y/y) and the U3 unemployment rate ticking up to 4.5%.
NFP Overview
The year may end not with a bang but with a whimper when it comes to the US jobs market.
Traders are keen for the latest NFP report from the BLS, which continues to dig itself out of the longest-shutdown-in-US-government-history hole with this week’s delayed report. As the table below shows, economists believe the US labor market extended its “low hire, low fire” regime in November:
Source: StoneX
After essentially missing the October jobs report due to a lack of survey data (limited information is expected to be released along with the November jobs data), the Fed will closely scrutinize the November figures when setting out the path of monetary policy through early 2026.
That said, traders are currently pricing in only a 1-in-4 chance of another rate cut in January, meaning that the market reaction to the release may be more limited unless it shows a large deterioration in the labor market.
NFP Forecast
As regular readers know, we focus on four historically reliable leading indicators to help handicap each month’s NFP report, but given the government shutdown, we don’t have access to the most relevant initial jobless claims reports this month:
- The ISM Services Employment subindex ticked up to 48.9 from last month’s 48.2 print.
- The ISM Manufacturing Employment subindex fell to 44.0 from, last month’s 46.0 reading.
- The ADP Employment report fell by -32K jobs, down from last month’s upwardly revised 5K reading.
- The 4-week moving average of initial unemployment claims fell to 217K, down nearly -10K from last month’s reading.
Weighing the data and our internal models, the leading indicators point to a potentially above-expected reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 60-100K range, albeit with a big band of uncertainty given the limited dataset.
Regardless, the month-to-month fluctuations in this report are notoriously difficult to predict, so we wouldn’t put too much stock into any forecasts (including ours). As always, the other aspects of the release, including the closely-watched average hourly earnings figure and unemployment rate, will also impact how markets react to the release.
Potential NFP Market Reaction
Technically speaking, the US dollar is relatively weak compared to most of its major rivals, leaving the balance of risks skewed to a potential bounce as long as the jobs report remains in positive territory.
US Dollar Technical Analysis – DXY Daily Chart
Source: TradingView, StoneX
The US dollar Index remains in a near-term downtrend, weighed down by expectations of additional FOMC interest rate cuts as other major central banks shift to a more neutral outlook heading into 2026. Technically speaking, DXY put in a “double top” pattern at 100.40 in November, setting the stage for a drop to the “measured move” objective near prior support at 97.60 in time.
That said, the greenback is oversold by some near-term measures, setting the stage for a short-term bounce back to the upper-98.00s as long as the jobs report remains in positive territory. With traders looking to square up positions ahead of the holidays, it would likely take a spike in the unemployment rate toward 4.5% or 4.6% to accelerate the downside momentum against that backdrop.