Non-farm Payroll Preview Focus Points

 1. Several employment-related data have been released this week, such as jobless claims, JOLTS job openings, ADP employment, as well as manufacturing and services PMI data. These data share a common theme: the pace of hiring by companies is starting to slow down. 

2. Yesterday's ADP report showed that the number of new jobs added was only 99,000, the lowest since 2021. While the job market is cooling, is the degree of cooling enough to cause market panic? 

3. According to the data, in the August ADP report, only three industries showed signs of layoffs, indicating that the job market's decline is not widespread but is more reflective of a return to normalcy. 

4. At the same time, the rising quit rate suggests that people are more confident in finding new jobs. With this level of confidence, it is less likely for the economy to slip into a recession.  

5.Looking at past data, ADP job additions have been significantly lower than non-farm payroll numbers in 10 out of the past 12 months. Therefore, based on probability and the above factors, tonight's non-farm payroll performance might not be too bad. 

Conclusion:

Given that the U.S. job market is cooling slowly, with varying hiring strength, it is estimated that the unemployment rate and wage changes will likely fluctuate by around 0.1%. The key lies in the non-farm employment data, with the previous value at 114,000 and the expected value at 160,000. There are three possible scenarios: 

If the reported figure falls within the range of 114,000 to 160,000, it would indicate a gradual cooling, which is bullish for gold, while U.S. stocks are likely to remain in a tug-of-war. This scenario is considered the most probable. 

If the reported figure is below 114,000, the rapid cooling could cause panic, leading to fluctuations in gold and a sell-off in U.S. stocks. 

If the reported figure exceeds 160,000, indicating a healthy employment situation, gold may take a sharp hit, while U.S. stocks could rally.