PREVIEW: US Nonfarm Payrolls are due on 4th September at 13:30BST/08:30EDT

SUMMARY: The consensus expects the US economy to have added 58K nonfarm payrolls in August, rebounding from July’s 23K decline, with the unemployment rate seen holding steady at 4.1%. Average hourly earnings are forecast to pick up, rising by 0.3% M/M, while the average workweek is expected to edge up to 34.4 hours. Labour market proxies have been mixed in August: claims data softened slightly during the survey window, ADP’s private payrolls data undershot expectations, and Revelio also pointed to cooling hiring in the month, while Challenger reported a rise in August job-cut announcements, despite stronger hiring plans. Business surveys were similarly mixed, with the ISM manufacturing employment index remaining in expansion but slowing, while ISM services employment stayed in contraction; in contrast, S&P Global’s surveys showed hiring strengthening across both manufacturing and services. Consumer confidence data showed an improvement in the labour market differential, although expectations for jobs six months ahead deteriorated. Analysts note that the August data may also be impacted by the expiry of Temporary Protected Status for some workers, which could mechanically weigh on payrolls. In terms of Fed policy, analysts say that a payrolls print close to expectations alongside a steady unemployment rate would be consistent with a stable labour market that is cooling but not deteriorating sharply, and that should keep policymakers focused on the inflation side of the mandate.

EXPECTATIONS: Headline nonfarm payrolls are expected to rise +58K in August (prev. -23K in July; 3-month average rate is 20K, 6-month average 44K, 12-month average 26K), with private payrolls seen +50K (prev. 30K). The unemployment rate is expected to be unchanged at 4.1%; note that the FOMC’s June projections had unemployment rising to 4.3% this year, and these projections will be updated at its 16th September meeting. The Chicago Fed’s real-time jobless rate estimate for August was little changed at 4.1% (4.08% unrounded), and it noted stable layoffs and a small dip in hiring. Average hourly earnings are seen rising 0.3% M/M (prev. 0.1%), with the average workweek ticking up to 34.4 hours (from 34.3).

TRADING REACTION: According to JPMorgan’s market intelligence desk, SPX index options expiring 4th September are pricing an implied move of roughly 1.1%. The desk writes that if NFP prints above 95K, SPX could fall between 0.50-1.25%; a print between 65-95K could see SPX lose 0.25-0.50%; if payrolls come in between 35-65K, SPX could trade between -0.25% and +0.50%; a print between 5-35K could see SPX gain 0.25-0.75%; and an NFP print below 5K could result in an SPX move between -0.25% and +0.50%.

BLS REVISIONS: The BLS prelim annual benchmark revisions released in August showed non-seasonally adjusted employment at March 2026 was 79K lower than previously estimated (down by around 0.1%). That is far smaller than last year’s 911K downward revision for the 12 months through March 2025. Analysts said that it implies non-seasonally adjusted payroll gains averaged just 11K a month through March (vs 18K initially published). Private employment was revised down more sharply, by 178K, implying growth of 24K a month (rather than 38K previously reported); retail saw the largest downward revision (-154.6K), transportation/warehousing the largest upward (+135.1K), and government was revised up 99K despite federal workforce cuts. The final revision will be incorporated in the February 2027 jobs data.

TEMPORARY PROTECTED STATUS: As another factor to watch, many analysts flag that Temporary Protected Status was cancelled at the end of July for around 300K immigrants, predominantly Haitian nationals, ending their permission to work in the US. Barclays estimates that roughly 200K of them were employed and still captured in July’s payrolls, and expects about 25K to drop out of the August count as employers stop reporting them, with further losses likely in the months ahead as the rest work through the system. The bank suspects that many had applied for asylum ahead of the deadline, with some securing it before status expired and thus remaining eligible to work, while others may still show up on payrolls where employers have yet to verify work eligibility.

CLAIMS DATA: In the week coinciding with the BLS survey window, initial jobless claims rose to 207K (from 189K into the July report), while continuing claims were little changed at 1.778mln (vs 1.777mln into July).

ADP: ADP reported a 38K rise in private payrolls in August, the slowest since January, and below the consensus 47K. Manufacturing, professional services and information shed jobs, while education and health care, construction, and leisure and hospitality hired solidly. Analysts at Pantheon Macroeconomics said the miss is only a trivial downside risk to the official data, noting that ADP’s forecast error vs initial estimates has averaged around 63K over the past year. Pantheon’s own model points to a 75K private payrolls rise, with a rebound in government education jobs; the consultancy estimates headline NFP at 125K, though it frames this as partly reversing prior weakness.

REVELIO: Revelio’s Public Labour Statistics showed the US economy added 36.5K jobs in August (prev. 79.2K), driven by gains in public administration, health care and social assistance, and professional and business services.

CHALLENGER JOB CUTS: Challenger reported that US employers announced 529,914 job cuts through August 2026, the lowest YTD total since 2022. Hiring plans were the highest since 2023. Still, in the month, employers announced 52,881 job cuts, rising from July’s 33,429. Challenger noted that planned hiring is above last year’s levels, but positions do not appear to be filled quickly.

BUSINESS SURVEYS: Business survey employment sub-indices are also not giving a clear signal in August. In manufacturing, the ISM manufacturing employment sub-index eased to 51.2 in August (from 52.8), remaining in expansion but at a slower pace; seven industries reported higher employment, three reported declines, and eight were unchanged; among the six largest manufacturing industries, only transportation equipment reported an increase. S&P Global’s final manufacturing PMI employment component posted its strongest 2026 pace, as swelling backlogs encouraged hiring. In the services sector, ISM services employment sub-index edged up to 47.8 in August (from 47.4), though it remains in contraction for a second month and below its 12-month average of 48.8; seven industries reported higher employment and eight reported declines; among the six largest services sectors, none reported an increase in employment, while five reported declines. The final S&P Global services PMI also saw employment growth strengthen, with services firms reporting the fastest job creation in just over 18 months, largely to meet activity requirements. At the composite level, employment increased at a steeper rate, with growth reaching a 19-month high, with hiring also linked to greater employer confidence and preparations for future growth.

CONSUMER CONFIDENCE: The Conference Board’s headline index slipped to 89.4 in August, but labour market components were more encouraging in the near-term: the Present Situation Index rose 6.8 points to 121.2, with those calling jobs “plentiful” up to 27.0% (from 24.4%) and “hard to get” down to 19.5% (from 21.7%), lifting the labour market differential 4.8 points to +7.5. The outlook was softer, however: the Expectations Index fell 5.8 to 68.2, with net labour market expectations six months ahead weakening 2.6 to -11.5%, as fewer expect more jobs available (14.6% vs 16.4%) and more expect fewer (26.1% vs 25.3%).

Payrolls previews in a low-print regime follow a familiar shape: with breakeven employment growth estimated well below recent norms, the distinction that matters is between a weak headline explained by supply-side factors and one that signals demand deterioration, and the market has historically treated the two very differently. The flagged mechanical drag from expired work authorisations fits the first category, and prior episodes of policy-driven payroll distortions have tended to be discounted at the release but to colour the following months' trend as the effect works through. The private-versus-government split is the other usual tell, since low headline prints padded by public sector hiring have been read as weaker than the aggregate. On the rates side, the established sequence is that the front end prices the near-term meeting off the headline and unemployment rate, while the revision history and average hourly earnings shape the reaction to the longer end; earnings reacceleration alongside soft hiring has historically been the combination that unsettles the inflation side of the mandate. The benchmark revision backdrop matters here too, as large downward revisions to the level of employment have previously reframed seemingly stable trends in retrospect. The calendar follow-ons are the updated Fed projections and how officials frame a cooling-but-not-deteriorating labour market against those numbers.