Pantheon Macro forecasts a weak jobs print and urges for Fed caution

Wall Street is looking ahead to Friday’s September nonfarm payrolls report for a clearer read on how far the Federal Reserve may still need to go on interest rates.

Pantheon Macroeconomics expects the data to disappoint. The firm forecasts a first estimate of just 60,000 net new jobs, below the 90,000 consensus, with private payrolls rising a muted 50,000. It attributes the shortfall in part to fading seasonal support that had previously boosted reported hiring.

A print of that magnitude, Pantheon said, would suggest the labor market is cooling enough that the Federal Open Market Committee should tread carefully before tightening further. Markets will also watch revisions to prior months, the unemployment rate, and average hourly earnings for confirmation that demand for workers is moderating without a sharper deterioration.

The report arrives as participants weigh whether recent cooling in other labor-market indicators is enough to keep the Fed on hold or whether stronger-than-expected hiring could reopen the case for another hike. Friday’s numbers are therefore expected to set the near-term tone for both equities and Treasuries.

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