• US Nonfarm Payrolls are seen higher by 180K in January after December’s 216K jump.
• The US jobs report will likely impact the market pricing of the dovish Fed pivot and the US Dollar direction.
• The United States Bureau of Labor Statistics will publish the employment data at 13:30 GMT.

The highly-anticipated Nonfarm Payrolls (NFP) data from the United States (US) is due on Friday at 13:30 GMT. The US labor market report will be published by the Bureau of Labor Statistics (BLS) and is expected to have a significant influence on the US Dollar (USD) price direction.

What to expect in the next Nonfarm Payrolls report?

The Nonfarm Payrolls report is expected to show that the US economy added 180,000 jobs in the first month of 2024, down from a whopping 216,000 jobs created in December. The Unemployment Rate is seen ticking up from 3.7% in December to 3.8% in the reported period. A closely-watched measure of wage inflation, Average Hourly Earnings, is expected to rise 4.1% in the year through January, at the same pace as seen in December.

The US labor market data holds the key to gauging the timing and the pace of the US Federal Reserve (Fed) interest rate cut this year, especially after the US central bank pushed back expectations of a March rate cut following the conclusion of its two-day policy meeting on Wednesday.

The Fed left its benchmark interest rates unchanged at the 5.25% to 5.50% range for the fourth consecutive meeting on Wednesday, in line with the market expectations. The statement, however, was read as slightly hawkish, as it stated, "until it has increased confidence that inflation is moving sustainably toward 2 percent, the Committee does not anticipate it will be appropriate to lower the target range for the federal funds rate.”

During his post-policy meeting press conference, Fed Chair Jerome Powell said, "based on the meeting today, I would tell you that I don't think it is likely that the Committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that [lower interest rates], but that is to be seen