NFP Preview: What Would it Take for the Fed to Cut in March?

Author: Matt Weller, CFA, CMT, Head of Market Research

Date: September 2, 2026

Key Points

• Expectations for the NFP report: +70K jobs, +0.3% month-over-month earnings, unemployment at 4.4%.
• Significant benchmark revisions to past NFP reports could indicate a loss of over 1 million jobs.
• A weak report or large downward revisions may lead to a drop in USD/JPY, targeting lower support levels.

NFP Report Expectations

The upcoming NFP report, scheduled for release on February 11 at 8:30 ET, is anticipated to show the creation of 70,000 new jobs, with average hourly earnings increasing by 0.3% month-over-month and the unemployment rate remaining at 4.4%.

NFP Overview

This month’s report comes after a government shutdown that delayed the release of economic data. Economists expect the labor market to continue its trend of low hiring and low firing. However, there are concerning indicators, such as a drop in job openings to 6.54 million, the lowest since the COVID pandemic, and a rise in initial unemployment claims.

Benchmark Revisions

The most critical aspect of this month’s report will be the benchmark revisions covering the 12-month period through March 2025. These revisions are expected to show a significant negative adjustment, potentially exceeding 900,000 jobs, particularly in sectors like leisure, hospitality, and manufacturing. If the revisions surpass 1 million, it could negatively impact market sentiment, regardless of the current month’s job figures.

Interest Rate Cut Considerations

Traders are beginning to speculate about the possibility of a Federal Reserve interest rate cut as early as next month. Current market pricing suggests a 1-in-6 chance of a rate cut, which could increase to over 33% with a weak NFP report or significant downward revisions, especially if inflation data shows decreasing price pressures.

NFP Forecast

Four leading indicators are being monitored to predict the NFP report:

• ISM Services Employment subindex fell to 50.3.
• ISM Manufacturing Employment subindex rose to 48.1.
• ADP Employment report showed an increase of 22,000 jobs.
• Initial unemployment claims remained steady at 212,000.

These indicators suggest a potential job growth figure in the range of 90,000 to 130,000, though predictions are inherently uncertain.

Market Reaction Potential

The market's reaction to the NFP report will depend on the interplay of job growth and wage increases:

• If wages increase less than 0.2% with fewer than 20K jobs, it could be bearish for the USD.
• If wages rise between 0.2% and 0.4% with 20-120K jobs, the USD may remain neutral.
• If job growth exceeds 120K with wages above 0.4%, it could be bullish for the USD.

Technical Analysis

The USD/JPY currency pair is currently testing support levels, and a strong NFP report could lead to a bounce, while a weak report may push it through support levels, targeting lower ranges.

For further updates and analysis, follow Matt Weller on Twitter: @MWellerFX.