Tomorrow morning’s release of the September Non Farm Payrolls report will go a long way in determining when (and if) the FOMC will ultimately bite the bullet and hike rates again.  As it stands now, economists are currently expecting an increase in payrolls of 172K, which would be a 21K increase from last month’s weaker than expected reading of 151K.  In the private sector, economists are expecting an increase of 170K, which would be an even larger improvement than the increase in the overall headline reading.  The unemployment rate is forecasted to remain at 4.9%.  Growth in average hourly earnings is expected to accelerate back up to 0.3%, while hours worked is forecast to increase to 34.4 from 34.3.  August’s employment report was a negative surprise for the market and kicked off what was essentially a steady stream of weaker than expected August data.  Data for September has so far shown signs of a rebound, so we’d look for some strength in Friday’s report as well.

With such high stakes surrounding the report, the market will likely have a big reaction to the upside or downside based on how the number comes in relative to expectations.  To that end, last night we published our eleven-page monthly preview for the September jobs report.  This report contains a ton of analysis related to how the equity market has historically reacted to the monthly jobs report, as well as how secondary employment-related indicators we track looked in September.  We also include a breakdown of how the initial reading for September typically comes in relative to expectations and how that ranks versus other months.

For anyone with more than a passing interest in how equities are impacted by economic data, this report is a must read.  To see the report, sign up for a monthly Bespoke Premium membership and get 10% off for life ($89/month).