Employment Report

Download Full Report Here: https://media.marketnews.com/USNFP_Oct2026_Preview_221922b6c5.pdf Executive Summary * Released on Friday at 0830ET, nonfarm payrolls are expected to have increased by 65k in October in seasonally adjusted terms or 61k for the private sector after a surprisingly soft September. * We see scope for further large two-month revisions although have less conviction on direction this month. * October should still be an important month ahead of the holidays and could offer clues on firms' expectations of discretionary spending ahead, although the seasonal pattern has faded over the years with Oct 2025 seeing its smallest NSA increase since 2009. * The unemployment rate is expected to round to 4.2% for a 2nd month, after edging up from 4.14% to 4.175% in September, with unsurprisingly a slight skew to a 4.1% (vs 4.3%) print considering the unrounded starting point. * AHE growth is seen re-accelerating to 0.3% M/M after a surprisingly soft September but with the Y/Y moderating further to 2.9% for a fresh softest print since May 2021. * Labor market resilience continues to allow the FOMC to focus on stubbornly above-target inflation, but larger dovish surprises could be of note considering a paring of rate hike expectations amid recent tech-led equity pressures. The FOMC is almost 80% priced to hike 25bp at its next meeting in December, before which it will also see the November NFP report, but hike expectations for subsequent meetings have seen a notable trimming thereafter. A second 25bp hike is currently priced for June compared to March before last week's FOMC decision.