*Author: [Dong Jing](https://wallstreetcn.com/articles/3782927#from=ios?ivk=1), Wall Street Journal* The U.S. non-farm payroll report for September will be released on Friday (October 2), which is the last employment data before the Federal Reserve's interest rate meeting on October 28. However, the market's pricing of
Author: Dong Jing, Wall Street JournalThe U.S. non-farm payroll report for September will be released on Friday (October 2), which is the last employment data before the Federal Reserve's interest rate meeting on October 28. However, the market's pricing of its impact has dropped to a recent low—historical experience shows that when the market is least concerned, it is often when the data can most stir the market.The median expectation on Wall Street is for an increase of 90,000 jobs, a significant drop from 162,000 in August. The market is highly focused on whether the August data will be significantly revised down, as unusual seasonal adjustments previously exaggerated the overall employment performance, leading to great uncertainty regarding the base effect of the September data.At the same time, the Federal Reserve's policy expectations have undergone a sharp turn in the past week: On Monday, the market priced in about a 70% chance of a rate hike in October, but after New York Fed President Williams stated that he is "not in a hurry to raise rates" and the August core PCE came in mildly, by Thursday's close, the probability of a rate hike in October had fallen to about 25%, with Goldman Sachs pushing back its next rate hike expectation to December.Seasonal adjustments are the biggest source of uncertainty in this report. Barclays estimates that if the August data were adjusted using this year's seasonal factors, the "impressive" increase of 162,000 would turn into a decrease of 74,000, indicating that the August data is severely overestimated. In this context, whether the August data is revised down will directly determine the interpretation of the September data.For the market, the real risk may not be at the front end of interest rates but in long-term bonds. Goldman Sachs data shows that CTA trend strategy funds currently hold about $390 billion in global bond shorts, with the short position in U.S. 10-year Treasury bonds at a historic maximum of 99%, and 30-year bonds reaching 100%. If the non-farm data is weak or the unemployment rate rises to 4.2%, a large-scale short covering by systematic funds could trigger violent fluctuations in the bond market.Expected Numbers: Consensus is Low, Discrepancies are SignificantThe forecast range from 80 institutions on Wall Street varies from Barclays' +50,000 to Nomura's +130,000, with almost all institutions' forecasts below the August reading, and most below consensus.Core expected data is as follows:Non-farm Employment: +90,000 (previous value +162,000); 3-month average 71,000, 6-month average 107,000, 12-month average 50,000Private Employment: +81,000 (previous value +127,000)Unemployment Rate: 4.1% (previous value 4.14%, not rounded)Labor Participation Rate: 61.6% (unchanged from previous value)Average Hourly Wage: Month-on-month +0.3%, year-on-year +3.2% (previous value +3.1%)Average Work Hours: 34.3 hours (previous value 34.4 hours)Goldman Sachs expects an increase of +80,000 jobs, slightly below consensus but above the three-month average, while also lowering its unemployment rate forecast to 4.0%, citing a decline in the number of continuing unemployment claims. Goldman Sachs also expects average hourly wages to rise only +0.2% month-on-month, citing "unfavorable calendar effects" as an explanation.Nomura's forecast of +130,000 is the highest on Wall Street, reasoning that August is historically the month where initial values are most likely to be revised upward.Unemployment Rate and Wages: Details Determine Market ReactionThe forecast range for the unemployment rate is between 4.0% and 4.2%, with discrepancies stemming from the unrounded 4.14% in August.Goldman Sachs and Nomura expect 4.0%, based on the decline in continuing claims;Wolfe Research expects 4.17%, which rounds to 4.2%;Bank of America expects 4.1% but warns of a potential correction after the surge of 569,000 in the August household employment survey, which could push the unemployment rate to 4.2%; and adds that "even 4.2% is consistent with a healthy labor market fundamental";Deutsche Bank warns that if the labor participation rate rises slightly, it could lead to the unemployment rate rounding up to 4.2%.Regarding wages, both Goldman Sachs and Nomura expect a month-on-month increase of +0.2%, while Deutsche Bank is above consensus, expecting +0.4%. Goldman Sachs' broader wage tracking indicator shows a year-on-year increase of +3.5%, with a third-quarter annualized increase of +3.1%. Wolfe Research points out that wage growth remains "below the Fed's preferred range of 3.5%-4.0%", calling it "surprisingly moderate."Seasonal Adjustment: August "Inflated," September Has Bidirectional RisksSeasonal factors are the core interpretive difficulty of this report.Wolfe Research points out that in a typical August, seasonal adjustments usually lower the seasonally adjusted numbers by more than 100,000. However, in August of this year, the seasonal factor actually pushed the data higher—this is the first time this has occurred since 2021.Bank of America economist Shruti Mishra provided the clearest explanation:The unadjusted employment increase in August was actually lower than the same period last year, but this year's seasonal adjustment was "close to zero," while the adjustment for August 2025 was -178,000, causing this year's unadjusted increase to flow almost entirely into the seasonally adjusted numbers.Bank of America attributes this anomaly to differences in the survey period—August 2026 had a four-week survey interval, while both 2024 and 2025 had five weeks.Barclays' conclusion forms a clear logical chain:If the August data is revised down → the September data may unexpectedly be strong; if the August data is not revised down → the September data may be weak.Bank of America advises investors "not to be misled by headline numbers" and maintains its estimate of potential job growth at a healthy level of "100,000+."Additionally, Bank of America also highlights a potential downside risk: about 200,000 Haitian TPS holders lost their work authorization on July 27, primarily concentrated in the food service, healthcare, transportation, and retail sectors. Bank of America's baseline scenario is a gradual drag, but it acknowledges that "the impact on September data may exceed expectations."High-Frequency Indicators of the Labor Market: Overall Positive, Consumer Confidence is an OutlierMultiple high-frequency indicators show that the labor market remains resilient:Initial Jobless Claims: The survey reference week was 198,000, lower than the 207,000 in the August survey window; the number of continuing claims fell to 1.719 million, the lowest since March 2023, supporting the forecast of a 4.0% unemployment rate.ADP: Private employment increased by 90,000 (expected 70,000, previous value 36,000), marking the first acceleration since May, led by education/healthcare and leisure/hospitality.Revelio: September +56,900, higher than the revised August +40,600, with public administration, healthcare, and construction leading the way.Challenger Layoffs: Announced layoffs of 43,000 in September, the lowest since 2022, but hiring plans are the lowest for the same period since 2011.PMI: S&P Global Flash PMI shows the fastest employment growth since June 2022; ISM manufacturing employment sub-index rose to 52.7.The only contrary signal comes from consumer confidence surveys. In the World Federation of Large Enterprises survey, the gap between "ample employment" and "hard to find employment" narrowed to just +1.7, and the net value of six-month employment expectations fell to -14.4, suggesting that consumers perceive the employment market is still weakening.Federal Reserve Policy: From "Skipping" to "Rate Hike" PathwayAfter the first rate hike in three years, the median of the Federal Reserve's dot plot indicates another rate hike in 2026. The market once priced this in for October but then quickly retreated.Currently, the market consensus has shifte