Goldman says NFP unlikely to shift April Fed cut unless data sharply surprises

At a glance:

• Goldman expects ~70k payrolls, in line with consensus

• Two Fed cuts priced; first expected around late April

• 70k–100k seen as equity-friendly outcome

• Sub-50k risks growth scare; >125k may delay easing

• Volatility expectations remain subdued

Goldman Sachs said the upcoming US non-farm payrolls (NFP) report is unlikely to materially shift market expectations for Federal Reserve policy unless the data delivers a significant surprise, with current pricing already well anchored around a mid-year easing path.

In a note to clients, Goldman said it expects headline payroll growth of around 70,000 jobs, broadly in line with prevailing consensus. While informal market “whispers” point to a modest upside risk, the bank argued that an outcome close to expectations would reinforce the existing macro narrative rather than disrupt it.

Markets are currently pricing two full Fed rate cuts this year, with the first 25 basis-point reduction expected around late April. Goldman said it would take a “somewhat dramatic” upside or downside surprise in the labour data to meaningfully pull that timing forward or push it back.

From a market perspective, Goldman described a payrolls print in the 70,000–100,000 range as the most constructive outcome for equities, consistent with continued economic expansion without reigniting inflation concerns or threatening the easing cycle. Such a result would support the view that the US economy is slowing gradually rather than stalling abruptly.

By contrast, a sub-50,000 payrolls print would be interpreted as falling below the economy’s estimated break-even employment growth rate, potentially unsettling investors by raising concerns over a sharper growth slowdown. At the other extreme, Goldman said a result above 125,000 jobs could prompt markets to reassess the timing of the first Fed cut, pushing expectations back toward June.

Overall, the bank said it does not expect “fireworks” from the release, with positioning and volatility pricing suggesting limited appetite for large moves. Reflecting this, Goldman noted that the S&P 500 is implying a move of roughly 68 basis points through the session, pointing to relatively muted expectations around the data.

This article was written by Eamonn Sheridan at investinglive.com.