U.S. jobs market perks up, but it's still not a great time to get hired
The U.S. labor market exhibited signs of marginal improvement in September, with job openings hitting a four-month peak. However, this uptick may be unsustainable, keeping the larger narrative of a sluggish labor market intact. This temporary stabilization supports expectations for a Federal Reserve pause, while traders should remain vigilant for emerging wage pressures in upcoming payroll reports that could stabilize or destabilize the current sentiment regarding the USD’s strength.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). Marketwatch's analysis reflects cautious optimism aligned with these expectations, highlighting the fragile nature of the current improvement in the labor market.
How firms align
JPMorgan's position is notably aligned with the overall sentiment, projecting a target of 1.10 for March 2026, suggesting confidence in the USD's relative strength amid this labor market data. Meanwhile, BofA diverges with a more bearish stance, setting a lower target of 1.04 which may indicate concerns over the sustainability of this job market improvement.
What the data shows
Recent analysis indicates watchfulness towards potential wage growth and its implications for monetary policy. These factors could interplay significantly with USD performance, driving traders to focus on the next payroll data updates as potential catalysts for market shifts.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Job openings rose to a four-month high, supporting USD strength.
- 02Watch for signs of wage inflation in upcoming payroll reports.
- 03Current USD support could be tested if labor market momentum wanes.
Market implications
Traders should monitor the upcoming payroll report and any wage growth indicators closely; weakness could shift sentiment against the USD. Our consensus target of 1.075 remains pivotal.
Risks to this view
A significant reversal could occur if wage pressures do not materialize in upcoming data, undermining Fed pause expectations and leading to shifts in USD sentiment.
Sentiment by currency
USD+EUR JPY GBPComposite USD score: +0.45
Sources & References
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