- US Nonfarm Payrolls data for March 2025 is released April 4th, with expected job growth of 135K- 140K.
- Market reaction is heavily influenced by recent tariff announcements and expectations of Federal Reserve policy changes.
- Fed Chair Powell’s speech following the data release is crucial for market direction and potential rate cuts.
- The technical analysis of Dow Jones shows bullish divergence, while the US Dollar Index (DXY) is oversold.
The US Bureau of Labor Statistics is set to release the non-farm payroll and jobs data for March 2025 on Friday, April 4th, 2025.
Job Market Expectations for February
Analysts are projecting a more subdued pace of job creation this time, with consensus estimates of 135K–140K new jobs added in March, down from February’s tally of 151K. The unemployment rate is anticipated to hold steady at 4.1%, while average hourly earnings are forecast to rise 0.3% month-over-month, maintaining an annual growth rate of 4.0%.
These expectations reflect concerns around economic headwinds, including trade-related uncertainties and inflation pressures stemming from recent global tariff disputes.
Key Estimates for the March Report:
- {{ecl-227||Nonfarm Payrolls}}: 135K–140K (consensus)
- Unemployment Rate: 4.1% (unchanged)
- Average Hourly Earnings (MoM): 0.3%
- Labor Force Participation Rate: Consensus data not released, but prior levels stood at 62.4%.
Market Reaction and Implications of the Data
Markets are no doubt still reeling and coming to terms with President Trump’s liberation day tariff announcements. The US Dollar and equity markets have both faced significant selloffs with the Magnificent 7 Index now down over -30% from its all-time high seen on December 18th.
The S&P 500 is down -7.5% year-to-date with large-cap tech beyond bear market territory.
The impact of the tariff announcements also saw the Nasdaq 100 record its largest single-day point loss in HISTORY. The index lost a total of -1060 points and came just 1.5% away from triggering the first circuit breaker since March 2020.
Given the impact tariffs are having on markets and what we have seen in the lead-up to the announcement, how important will the NFP and jobs data be?
This is where it gets intriguing, to say the least. There is a school of thought that, given recent developments, the role of the Federal Reserve will be crucial moving forward. The uncertainties created by tariffs and the potential slowdown of growth may be offset by Federal Reserve policy and rate cuts.
Another sign of this comes from the behavior of bond markets and the US dollar in the face of the recent selloff. Behavior suggests that markets are hoping the Federal Reserve will step in to provide relief by accelerating rate cuts to help absorb the shock.
After the jobs data today, we have a speech by Fed Chair Powell, which could prove crucial. If he speaks with more urgency, stock markets might stabilize. If not, more selling is likely. Either way, it seems rate cuts will happen sooner, leading to lower yields, higher bond prices, and a weaker dollar.
With that in mind, the NFP release today takes on a new dimension altogether.
Potential Impact on the US Dollar Index (DXY), S&P 500, and Dow Jones (DJIA)
Here’s how the market might respond to different outcomes in March’s job numbers:
Potential Impact on the US Dollar and US Indices Based on the Data Released
Source: LSEG, TradingEconomics. Table Created by Zain Vawda
The US Dollar Index (DXY) is heavily oversold, while indexes like the S&P and Dow Jones are also nearing similar territory. Given the strong bearish momentum caused by the tariff announcement, it’s hard to see them bouncing back unless the upcoming NFP report significantly beats expectations.
Will that help alleviate growth fears and help the stock market as well or just the US Dollar? This and many questions will be what market participants grapple with heading into today’s data releases.
I think we could get more clarity from Fed Chair Powell’s remarks rather than the actual data print and this is where I will be keeping a close watch.
Technical Analysis - Dow Jones (DJIA)
Looking at the Dow Jones, which is hovering just above oversold territory, having printed fresh YTD lows yesterday.
The index has one silver lining in the face of the current market dynamics in that the technical picture does offer a sliver of hope.
There is bullish divergence in play on the Dow Jones daily chart as price makes lower lows, but the RSI makes higher lows. This can signal that the downward momentum is weakening, and a price reversal to the upside might be coming.
There is also the psychological 40000 level just hovering below the current price level. If this level is broken then the 39588 handle may provide support.
A recovery from here, however, may face resistance at 40537, 40738,41095 and 41400.
Of course, the countless dynamics at play and current sentiment remains tilted to further downside. Whether the NFP can arrest this slump remains to be seen.
US Dollar Index (DXY) Daily Chart, April 4, 2025
Source: TradingView
Support
- 40231
- 40000
- 39588
Resistance
- 40537
- 41095
- 41400