Another wild week in the markets is about to end with a bang the July U.S. Nonfarm Payrolls report drops today, and traders are bracing for impact.
While the Fed already made its move earlier this week, keeping rates steady at 4.50%, the labor market still holds massive influence over rate cut odds heading into September. Everyone’s watching whether today’s jobs data confirms a slowdown or keeps the hawks perched.
Here’s what you need to know:
1. A Weaker NFP Is Expected But Not a Collapse
Wall Street expects the U.S. economy to have added just 106,000 jobs in July, a clear slowdown from June’s 147,000 print. Unemployment is forecast to tick up from 4.1% to 4.2%, and wage growth is seen at 0.3% m/m and 3.8% y/y.
Those aren’t disaster numbers but they’re soft enough to hint at waning demand for labor. The Fed’s dual mandate means every tick matters. Less hiring could give doves more ammo next month.
Still, the timing is tricky. Because the Fed already met this week, any immediate reaction might be muted. But that doesn’t mean traders will ignore the report especially if it delivers surprises.
2. The Labor Market Is Slowing… But Not Collapsing
Despite the cooler forecast, recent data shows the jobs engine hasn’t seized up. ADP showed private payrolls up 104,000 in July — modest, but better than feared. Meanwhile, JOLTS showed job openings dipping to 7.43 million in June still historically strong, just not red hot.
[Breaking]🔥 U.S. economic surprise:
ADP Jobs crush forecast: 104K vs 77K
GDP Q/Q rebounds to 3.0% from -0.5%
GDP Price Index cools to 2.0% (below 2.2% est.)At this rate, the Fed has no justification left to cut rates...
— #NOVA REAL INVEST (#@novarealinvest)
12:48 PM • Jul 30, 2025
The Fed acknowledged that growth has moderated, but unemployment remains low. Chair Powell emphasized that inflation is still above target and that it’s too early to loosen policy, especially with tariffs still clouding the inflation picture.
Looks like, we’re in a limbo. The Fed’s holding, the jobs market is cooling but not cracking, and everyone’s watching what comes next.
3. Fed Rate Cut Hopes Take a Hit But September’s Still in Play
Markets went into this week with a 60% chance of a rate cut in September. After Powell’s press conference? That’s down to around 43%, according to the CME FedWatch Tool.
Why? Powell doubled down on the “meeting-by-meeting” message, sidestepped Trump’s pressure campaign, and made it clear that tariffs haven’t shown up in inflation yet. He also shrugged off two dissenters Waller and Bowman who wanted a cut now.
But the Fed isn’t ruling anything out. If today’s NFP is weaker than expected, rate cut odds could swing back fast. Traders need to stay nimble.
Here’s the Takeaway:
The Fed may have passed the baton, but NFP is still a game-changer. Today’s print won’t just affect USD pairs, it could reset September rate cut expectations and shift sentiment across equities, gold, and bonds. Expect volatility, don’t overcommit early, and trade the reaction, not the number.