The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market’s reaction is the distribution of forecasts.
In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.
Non-Farm Payrolls
- -15K to 150K range of estimates
- 50K-80K range most clustered
- 62K consensus
Unemployment Rate
- 4.4% (13%)
- 4.3% (77%) – consensus
- 4.2% (10%)
Average Hourly Earnings Y/Y
- 3.9% (11%)
- 3.8% (68%) – consensus
- 3.7% (18%)
- 3.4% (3%)
Average Hourly Earnings M/M
- 0.4% (4%)
- 0.3% (85%) – consensus
- 0.2% (9%)
- 0.1% (2%)
The Fed has been placing more emphasis on the unemployment rate since last year because the “breakeven rate” (the number of jobs needed to keep unemployment stable) has become a moving target that is difficult to calculate. Fed economists estimate that the breakeven rate has plummeted.
Some estimates suggest that because the labor force is growing so slowly (less than 10,000 people per month in early 2026), the US might only need near-zero job growth to keep unemployment from rising.
I feel like the consensus for the unemployment rate is off.There’s a little more probability of a higher than expected number (4.4%) than a lower than expected one (4.2%). Given the recent jobs data and the pretty fast drop in continuing claims, I think like a lower than expected number is more likely.
According to the Atlanta Fed Wage Growth Tracker, wage growth has also been rising steadily since December 2025, especially for job switchers. That’s not what Average Hourly Earnings data has been showing as it kept on gradually falling to cycle lows. In the next months, we should get a better picture of the trend, but as of now it looks like the US labour market is regaining steam.
