NFP Preview - March 2026

Key Takeaways

• Lead indicators are positive for payrolls growth.
• Strikes and weather-related disruptions could impact February jobs growth.
• Potential market reactions are anticipated based on the NFP report.
• The market is expected to return to a fundamental focus.

February Jobs Report Overview

The February jobs report is set to be released on March 6, 2026, at 1330 GMT. Analysts predict an increase of 60,000 in Non-Farm Payrolls (NFP) for the previous month, with the unemployment rate expected to remain steady. Average hourly earnings are also anticipated to hold steady at 3.7%, while private sector payrolls are projected to grow by 65,000, a decrease from 170,000 in January.

Positive Lead Indicators

Leading indicators for the US labor market suggest a moderate improvement. The ADP private sector payrolls report for February exceeded expectations, showing an increase of 63,000 jobs, the highest since November. Additionally, the ISM employment index for both manufacturing and services sectors reported increased hiring sentiment, with the service sector index rising to 51.8, indicating potential momentum in the labor market as the first quarter progresses.

Factors Impacting Jobs Growth

Several factors may influence the February jobs growth. Weather-related disruptions, particularly severe winter storms at the end of January, could account for a loss of approximately 25,000 jobs due to delayed hiring. Furthermore, notable strike actions, including around 5,000 workers, such as 1,000 Starbucks employees on strike since November, may also weigh on job growth.

Market Reactions

Market reactions to the upcoming payrolls report may be significant, especially given the geopolitical tensions in the Middle East. A substantial deviation from expectations in the payrolls data could lead to notable movements in Treasuries and yields. A weaker payrolls report may push Treasuries higher and yields lower, while a stronger report could have the opposite effect. However, the credibility of the data will play a crucial role in determining market reactions.

Current Market Sentiment

Risk sentiment has been volatile due to geopolitical events, particularly the potential for an oil price shock affecting global economic prospects. Despite this, the S&P 500 and Nasdaq have shown resilience compared to other global indices. The dollar has strengthened ahead of the report, supported by reduced expectations for Federal Reserve rate cuts, which have decreased from over two cuts to just over 1.5 cuts priced in for the year.

Conclusion

The market has been primarily focused on geopolitical issues rather than economic fundamentals. A surprising NFP report could trigger significant market reactions, with a stronger reading likely to bolster the dollar and increase Treasury yields, while a weaker reading could lead to a recalibration of Fed rate cut expectations.