NFP Preview: Could We See the First Sub-100K Jobs Report of 2025?

NFP Preview: Could We See the First Sub-100K Jobs Report of 2025?

NFP Key Points

• NFP report expectations: +120K jobs, +0.3% m/m earnings, unemployment at 4.3%
• Leading indicators point to a below-expectations reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 75-125K range
• The US Dollar Index (DXY) has fallen to 3+ year lows, potentially setting the stage for a bounce if we see more job growth than expected… though confirmation of a slowing labor market could still put a July rate cut on the table if CPI (July 15) also comes in weak

When is the June NFP Report?

The June NFP report will be released on Thursday, July 3, at 8:30 ET.

NFP Report Expectations

Traders and economists expect the NFP report to show that the US created 120K net new jobs, with average hourly earnings rising 0.3% m/m (3.9% y/y) and the U3 unemployment rate ticking up to 4.3%.

NFP Overview

If you’re watching the same metrics I am, the deterioration in the labor market is unmistakable.

In addition the classic U3 unemployment rate nearing its highest level in 2.5 years, we’ve also seen the first negative ADP reading since early 2023, a sustained uptick in initial unemployment claims, and persistently high continuing claims figures, signaling that while layoffs haven’t necessarily surged, it’s increasingly difficult for unemployed workers to secure a new job. In a twist on the “frog in boiling water” analogy, the jobs market is more like my daughter in the bathtub: blissfully unaware as the once-hot water gradually cools…until she’s suddenly shivering and begging for a towel, just as the Fed may soon need to cut rates to rescue a chilling labor market.

When it comes to this month’s jobs report, expectations are for +120K jobs, with the unemployment rate expected to tick up to 4.3%. One key area to watch will be the average hourly earnings measure, which is expected to come in at 0.3% m/m, down a tick from last month’s reading.

 

Crucially, traders now expect about two-and-a-half 25bps rate cuts from the Federal Reserve this year, though many traders still think Jerome Powell and Company are likely to hold steady at this month’s meeting.

NFP Forecast

As regular readers know, we focus on four historically reliable leading indicators to help handicap each month’s NFP report, but given the vagaries of the calendar this month, we only have three in advance:

• The ISM Manufacturing PMI Employment component fell slightly to 45.0 from last month’s 46.8 reading.
• The ADP Employment report fell by -33K jobs, down from last month’s downwardly revised 29K print.
• Finally, the 4-week moving average of initial unemployment claims ticked up to 244K from last month’s 235K reading.

Weighing the data and our internal models, the leading indicators point to a below-expectations reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 75-125K range, albeit with a big band of uncertainty given the current global backdrop.

Regardless, the month-to-month fluctuations in this report are notoriously difficult to predict, so we wouldn’t put too much stock into any forecasts (including ours). As always, the other aspects of the release, prominently including the closely-watched average hourly earnings figure which came in at 0.4% m/m in the most recent NFP report.

Potential NFP Market Reaction

	Wages < 0.2% m/m	Wages 0.2-0.4% m/m	Wages > 0.4% m/m
< 100K jobs	Bearish USD	Bearish USD	Slightly Bearish USD
100-140K jobs	Slightly Bearish USD	Neutral USD	Neutral USD
> 140K jobs	Slightly Bullish USD	Slightly Bullish USD	Bullish USD

As I outline below, the US Dollar Index (DXY) has fallen to 3+ year lows, potentially setting the stage for a bounce if we see more job growth than expected… though confirmation of a slowing labor market could still put a July rate cut on the table if CPI (July 15) also comes in weak.

US Dollar Technical Analysis – DXY Daily Chart

Source: TradingView, StoneX

As the chart above shows, the US Dollar Index (DXY) continues its 2025 downtrend unabated, hitting the lowest level since early 2022 amidst trade policy uncertainty and the aforementioned deterioration in the jobs market. From a technical perspective, the greenback is oversold, so there may be scope for a near-term bounce back toward previous-support-turned-resistance near the 97.75 level if the jobs report comes in better than expected heading into a long holiday weekend in the US.

That said, as long as DXY remains below that level (as well as bearish trend line resistance and the declining 50-day EMA), the long-term downtrend will remain intact and traders will be more likely to sell any near-term bounces rather than position for meaningful gains.

-- Written by Matt Weller, Global Head of Research

Follow Matt on Twitter: @MWellerFX