Recent big data indicators indicate a pace of job creation above the recent payrolls trend. We assume above trend contributions from the recent surge in immigration & catch-up hiring. Hence, we expect the headline NFP no for Sep to be at 225k. We also believe that the Aug NFP nos will be revised higher as has been typical over the last decade. We expect the revision to the tune of 50k in the Aug NFP no. We see the risks to our non-farm payrolls forecast tilted to the upside. The Aug JOLTS data & the weather effects add to the upside risk on the margin. We project the unemployment rate to round up to 4.2% reflecting a flat labor force participation rate & firmer household employment growth. We expect average hourly earnings to come at 0.3% MoM & 3.8% YoY. In totality, SEP NFP data might show a US economy holding up in employment data. We are tracking Q3 US GDP to be at 3.2% with domestic final sales at 2.8%. Hence US economy is headed for a no landing scenario with strong growth & moderate inflation. We expect Fed to cut by a total of 100 bps by March’25 and hold it’s ground around 3.5-3.75 levels by mid CY25. We see 25 bps cut each in Nov & Dec FOMC meeting.
