On Friday night, the U.S. February Non-Farm Payrolls (NFP) and unemployment rate report will be released. The strength or weakness of this report will directly impact the Federal Reserve's March dot plot and future rate expectations.

Currently, U.S. stocks are experiencing a period of turbulence. The once high-flying Magnificent Seven and the Nasdaq Composite have underperformed global markets in 2025. In such uncertain times, investors are relying on economic data for guidance.

Recent employment indicators suggest that the U.S. labor market is cooling significantly:

The adp Employment Report, often referred to as a mini NFP, showed that February's private payrolls increased by only 77,000, far below the expected 140,000.

Additionally, February job cuts surged to 172,000, a sharp rise from 50,000 in January.

How Will NFP Impact the Markets?

The market's reaction to the NFP report will depend on whether the data exceeds, meets, or falls short of expectations:

If NFP exceeds expectations, unemployment falls below 4%, recession fears ease, stocks and the U.S. dollar strengthen, Fed rate cut expectations decline, and gold and silver face downward pressure.

If NFP and unemployment meet expectations, limited market impact.

If NFP disappoints, and unemployment rises above expectations, recession fears intensify, stocks and the U.S. dollar decline sharply, gold and silver will surge.

Wall Street's NFP Forecasts

Goldman Sachs: NFP Estimate: +170,000, Unemployment Rate: 4.0%, Average Hourly Earnings (MoM): +0.3%

Key Points: Solid job growth supported by pent-up hiring demand and immigration. However, federal job cuts (layoffs, hiring freezes, delayed resignations) could reduce payrolls by 10,000 jobs, though the impact is manageable. Strikes could have a net drag of 5,000 jobs.

Weather Impact: Colder-than-usual temperatures in February, but reduced snowfall (seasonally adjusted) means a neutral impact on employment.

Wage Growth Outlook:+0.3% MoM, reflecting weakening wage pressures but with some calendar-based support.

Bank of America (BofA): NFP Estimate: +185,000, Unemployment Rate: 4.0%,  Average Hourly Earnings (MoM): +0.3%

Key Points: Federal hiring freeze could slightly reduce government employment, which typically averages 25,000 monthly job additions. DOGE-driven job cuts are unlikely to have a significant impact on February's report.

Weather Impact: February's temperatures were below average, meaning cold weather could pose some downside risks.

Work Hours Impact: Average weekly hours are expected to rise to 34.2, mechanically lowering hourly earnings to 0.3% MoM.

Inflation vs. Wage Growth: Wage growth remains above inflation, meaning consumers' purchasing power is increasing, supporting economic expansion despite slower job growth.

Barclays: NFP Estimate: +150,000,  Unemployment Rate: 4.0%,  Average Hourly Earnings (MoM): +0.3%

Key Points: Federal layoffs are expected to have a moderate impact, while private-sector job gains are estimated at 130,000, slightly above January's 113,000. 

Labor market risks remain mixed: Some models suggest upside potential, while policy uncertainty poses downside hiring risks.

Unemployment Rate: DOGE-related layoffs occurred too late to affect February's jobless rate. While government layoffs could introduce some volatility, the unemployment trend remains downward. Slower immigration growth in 2025 could gradually pressure labor supply expansion.

Wage Growth Outlook: +0.3% MoM and 4.0% YoY, reflecting steady wage gains. Average weekly hours are expected to rise slightly to 34.2.