On March 7, the US Bureau of Labor Statistics will release its Non-farm Payroll Report (NFP). As President Donald Trump’s global tariff onslaught takes hold, eroding market sentiment, traders take a more cautionary stance. But before we delve into estimates and analyse their impact on the Forex and commodities markets, let’s take a look at the previous release.
Is there any strength in the past NFP figure?
In January 2025, the US economy added only 143,000 new jobs, significantly lower than the December 2024 upwardly revised figure of 307,000. The unemployment rate dropped to 4%, with the most jobs added in healthcare, retail trade, and social assistance.
The number of employed people changed little in December – 6.8million. As President Trump’s government’s ‘efficiency’ and ‘operational optimisation’ slash through the workforce, one question hovers in the air: ‘How much lower will February NFP go?’
Flipping the coin of uncertainty
Last week’s face-off between US President Trump and Ukraine President Volodymyr Zelenskiy unnerved investors, intensifying the market jittery. Furthermore, Trump’s tariff policy sent US stocks tumbling into negative territory.
Wall Street saw the 10-year Treasury Yields drop from 4.27% to 4.23%, immediately after the televised high-profile meeting. European futures DAX and CAC40 also skidded 0.6% while Eurostoxx 50 futures tumbled as much as 1.4% and were later seen at 0.6%.
What comes next remains anyone’s guess. In this context, Trump’s “America First” or rather “America Victim” of funnelling millions and millions of US dollars into climate change, WHO, NATO, Ukraine, USAID, and the list may continue may well isolate the USA from the rest of the world, positioning it as an injured party rather than the world’s strongest economy. And chances are that the upcoming NFP will reflect the negative impact of such a stance.
According to Trading Economics, the non-farm sector will have expanded by 140,000 by the end of the current quarter. In the longer term, the NFP is expected to trend around 170,000 in 2026 and 150,000 in 2027.
Could DOGE’s Actions Affect the NFP?
While the controversial actions of the Department of Government Efficiency (DOGE), led by Elon Musk, have made waves across the U.S. and globally, they are not expected to have a significant impact on tomorrow’s figures.
While the federal workforce comprises approximately 3 million of the 171 million civilian workforce, making up about 1.75% of the total, the recent layoffs are expected to have a modest impact on overall employment figures. Economists estimate that the hiring freeze and mass layoffs may reduce job growth by 10,000.
However, the broader economic implications of these federal workforce reductions remain uncertain. Potential consequences include decreased consumer spending in regions heavily reliant on federal employment and disruptions to services provided by affected agencies.
In summary, while the DOGE cuts and federal worker layoffs are expected to have a modest direct impact on the NFP figures, the broader economic effects warrant close monitoring in the coming months.
What’s next?
Whether the official NFP report will match these downbeat figures remains to be seen. Meanwhile, global payroll processor ADP released its employment report, which typically serves as an indication of the upcoming official data. The reading came in way below expectations – 77,000 versus 140,000.
These grim numbers sent the US Dollar tumbling against major counterparts, such as the Euro. EURUSD soared to 1.07911, in overbought territory on the TibiGlobe platform, as USD tumbled on Wednesday. Traders must exercise caution, as a correction may be near.
The Canadian dollar recovered amid the trade duel between Canada and the US, pushing USDCAD to 1.43355, in negative territory with TibiGlobe.
USDMXN retraced as the Mexican peso gained some ground against the US dollar on news that the US might adjust its tariffs on vehicles. Last seen in the area of 20.3850 with TibiGlobe, the exotic pair appears to have plenty of room for a movement upwards. It may be worth adding it to your watchlist.
Gold, trader’s favourite in times of uncertainty, edged lower at 2919.01, on policy uncertainty. As volatility remains high, traders must tread with caution and practise risk management. Stop Loss is always a good way to help prevent significant losses. Check it out!
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