Forecasts suggest that relatively small differences in the jobs reading next Friday could significantly affect the Fed's decision this month.
It is likely that if the non-farm payrolls report (NFP) falls below 125 thousand jobs with an unemployment rate of 4.3% or higher, the expectation is that the Fed will then cut interest rates by 50 basis points, and then a smooth decline may be a very difficult thing and recession expectations will become increasing for the US economy.
As for if the jobs increase, as expected by the markets, near 164 thousand jobs and unemployment falls to 4.2% or less, this would lead to a reduction in interest rates by 25 basis points.
Now the Fed's focus has shifted from inflation to the labor market in determining the Fed's policy for the coming period.
