The US Dollar held broadly flat near 102 last week while the two-year Treasury yield fell roughly 13-14 basis points. That happened even though inflation is stuck near 3.7% and markets still price a December rate hike at roughly 76%-80%. If a single hiring number decided where the Dollar went, the October jobs report would be simple to read. The week’s price action suggests it will not be.
A busy run of labour data starts this week. JOLTS arrives Tuesday, ADP on Wednesday and Revelio Labs on Thursday. Friday’s nonfarm payrolls report follows, with consensus at +65,000 jobs and unemployment at 4.2%.
All of it lands just days after Fed Chair Kevin Warsh led his first patient-sounding Federal Open Market Committee (FOMC) meeting. On 28 October the committee held rates at 3.75%-4.00% in a 10-2 vote.
This piece gives you a way to read each release and a view on which early indicator deserves more of your attention. It also maps how different mixes of jobs and wages could move the Dollar and hike pricing.
Why did the Dollar and short-term yields slip when inflation is still sticky?
Falling yields usually signal that markets expect easier policy. Yet the FOMC statement said inflation “remains elevated”, and the committee wants more information before it can return inflation to 2%. So why did rates markets soften?
Brown Brothers Harriman (BBH) strategist Elias Haddad points to three forces:
- Warsh’s patient tone. He acknowledged elevated inflation but stressed waiting for more data rather than committing to a string of hikes.
- AI-investment slowdown fears. A tech-sector selloff raised doubts about whether the AI spending cycle can keep supporting US growth.
- Pared expectations beyond December. A December hike stayed priced, but bets on further hikes after it were trimmed.
Warsh framed his approach this way:
Inflation can be brought back to 2% without the Fed needing to “throw sand in the gears” through an unnecessary slowdown or a rise in unemployment. (Kevin Warsh, Fed Chair, via Reuters, 28 October)
A growth scare mixed with a policy repricing
The move came in two stages. During Warsh’s press conference, the two-year yield fell 3.8 bp to 4.70% and the Dollar Index, which tracks the Dollar against a basket of major currencies, slipped 0.2%. A basis point (bp) is one hundredth of a percentage point.
By the weekly close, tech weakness had pushed the two-year to about 4.56%-4.60%, while the Dollar Index sat near 101.7-102.0. These yield levels come from different measurement dates, so treat them as snapshots rather than one continuous series.
December hike odds tell the same story. They stood at 85%-87.5% straight after the FOMC and have since eased to about 76%-80%.
What this tells you is that markets are pricing a slower path of hikes, not an end to them. That is a fine distinction, and data that challenges it in either direction can move prices quickly.
The gap between the Fed’s dot plot and market pricing matters here: with committee members split on hikes, the median is a weak guide, and futures pricing is the faster-moving signal around data releases.
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What each release this week can tell you before Friday’s October jobs report
The week builds towards Friday in steps. Each release adds a piece of evidence, and each comes with a benchmark worth knowing before it hits.
| Release | Day | Forecast | Prior | What to watch |
|---|---|---|---|---|
| September JOLTS openings | Tuesday | 7.10 million | 7.079 million (August) | Confirmation of low hiring and low firing |
| October ADP private payrolls | Wednesday | +67,000 (Continuum: +65,000) | +90,000 | Whether private hiring is cooling |
| October Revelio Labs employment | Thursday | No consensus | +56,900 | Hiring rate and postings trend |
| October nonfarm payrolls | Friday | +65,000 | +29,000 | Headline, revisions, wages, unemployment |
JOLTS, the Job Openings and Labor Turnover Survey, measures vacancies, hires and departures. BBH expects Tuesday’s figures to confirm a labour market where companies are neither hiring nor firing much.
Revelio has no consensus forecast, so you need to judge it against its own recent trend. In September its hiring rate fell to 19.4% from 20.0%, and active job postings dropped 1.8% month on month to about 40% below their 2022 peak.
The wage and unemployment detail behind the headline
Friday’s details matter as much as the headline. Unemployment is forecast at 4.2%, slightly above the FOMC’s 2026 projection of 4.1%.
Average hourly earnings are expected to rise 0.3% month on month, up from 0.1%, and 2.9% year on year, down from 3.0%. That September annual figure is the published Bureau of Labor Statistics (BLS) result, not the 3.2% forecast that circulated before release.
Treat Tuesday through Thursday as the build-up. The evidence they add frames how surprising Friday’s number really is.
Revelio or ADP: which is the better guide to payrolls?
Many investors treat Wednesday’s ADP report as a preview of Friday’s payrolls. BBH argues that habit deserves a rethink, and the reason lies in how each series is built.
ADP counts anonymised payroll transactions from participating employers. It covers private-sector jobs only, excludes government employment, and is benchmarked each year to the BLS Quarterly Census of Employment and Wages (QCEW), which covers more than 95% of US employment.
Revelio works differently. It standardises more than 100 million online professional profiles, job postings, reviews and layoff notices, then uses machine learning to map employers, occupations and worker characteristics. Machine learning here means software that finds patterns in large datasets and uses them to make estimates.
| Feature | ADP | Revelio |
|---|---|---|
| Data source | Actual payroll transactions | Online profiles, postings, reviews, layoff notices |
| Coverage | Private sector only | Broad, skewed towards professional workers |
| Strength | Real payroll and compensation data | Breadth, timeliness, hiring and postings signals |
| Limit | Diverges from official payrolls | Model-based; profiles can be stale or duplicated |
BBH’s case rests on the current phase of the cycle. Revelio economist Lisa K. Simon has described a low-hire, low-fire stasis where matching between employers and job seekers is impaired. The Chicago Fed estimated that almost 80% of the rise in its unemployment-related measure since early 2023 came from lower job finding, not higher separations.
When the story is about hiring drying up rather than layoffs surging, a gauge built on postings and hiring rates has an edge.
Why the correlation numbers differ
BBH reports that Revelio’s correlation with payrolls is 0.74 since 2010, against 0.26 for ADP, which is near zero year to date. Correlation measures how closely two series move together, where 1 means perfectly in step.
Revelio’s own figures use a different window: 0.74 against BLS data from January 2021 to July 2025, and 0.57 for ADP. These figures are not directly comparable with BBH’s, so always check the sample period behind any accuracy claim.
The BLS establishment survey remains the official benchmark. For the direction of the labour market, give Revelio’s hiring-rate and postings signals more weight, while keeping ADP’s compensation data as a useful cross-check. That approach should stop you over-reacting to Wednesday’s print.
How could payrolls and wages combine to move the Dollar and Fed hike odds?
This year’s jobs reports offer a working template for how markets respond. The pattern they reveal is less intuitive than it first appears.
What the 2026 reports taught markets
- May report (5 June): Payrolls of +172,000, driven largely by low layoffs, lifted the two-year yield about 10 bp to 4.15%. The Dollar Index rose 0.2% and December hike odds jumped from 48% to 65%.
- June report: Revisions pulled May’s figure down to 129,000, a reminder that headlines can be rewritten.
- July report (7 August): Payrolls of -23,000 sent the two-year down about 8 bp to 4.16%.
- September report (2 October): Payrolls of +29,000 with wages up just 0.1% month on month nudged the two-year down about 3 bp.
The lesson is that hiring and wages do not need to move together. Strong payrolls lifted yields and the Dollar even with modest wage pressure, because markets focused on the Fed’s room to keep tightening.
Four ways Friday could land
| Scenario | Likely Fed read | Dollar and two-year yield tilt |
|---|---|---|
| Payrolls well above 65,000 with firm wages | Reinforces a December hike | Could lift both |
| Payrolls near or below 29,000 | Revives fears of overtightening a low-hire market | Likely lower |
| Strong payrolls, soft wages | Supports a gradual approach | Ambiguous; BBH sees the Dollar restrained |
| Weak payrolls, sticky inflation | Hardest policy trade-off | Dollar decline may be limited |
BBH’s view is that steady hiring with slower wage growth fits Warsh’s gradual approach and keeps the Dollar in check. Weak payrolls alongside sticky inflation is trickier, because inflation still constrains how far the Fed can lean dovish.
The unemployment rate can mislead too. September’s rise to 4.2% partly reflected more people joining the labour force, not an employment collapse.
A falling unemployment rate can mislead when the participation rate falls, as in June 2026 when the rate slipped to 4.2% while participation dropped 0.3 points and workers left the labour force.
The read you should take from this is to look past the headline. The mix of payrolls, wages, unemployment and revisions, not any single figure, sets the direction for hike odds. These scenarios are conditional and markets may respond differently on the day.
What slower wages and sticky inflation mean for your household budget
Away from bond screens, the same data lands on the kitchen table. There, the picture is a squeeze from two sides.
Slower wage growth supports Warsh’s view that pay is adjusting appropriately. But when prices keep rising faster than pay, your real income, meaning income adjusted for inflation, shrinks.
- September average hourly earnings: +0.1% month on month, 3.0% year on year
- September CPI: +0.6% month on month, 3.7% year on year
- September PCE price index: +0.5% month on month (Bureau of Economic Analysis, 29 October)
The Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) price index both track changes in what households pay for goods and services.
Real earnings are falling Real average hourly earnings fell 0.5% month on month (BLS, 14 October) and 0.7% year on year (BLS, 20 October).
Weak pay growth does not bring easier policy while inflation stays this high. You get the slower raises without the relief of rate cuts.
Friday’s forecast keeps that pressure in place. Wages rising 2.9% a year against 3.7% inflation means your purchasing power is still going backwards, however the Dollar trades.
That matters for markets as well. Shrinking purchasing power can weigh on discretionary spending, and combined with worries about an AI-investment slowdown, it feeds the growth concerns already sitting under equities and rates.
What Friday’s number can and cannot settle for the Fed and the Dollar
The Fed is patient but still leaning towards a hike, with December odds around 76%-80%. The early data is mixed, Revelio offers the sharper hiring gauge, and households are losing ground to inflation.
When the report lands on Friday 6 November, check these first:
- Payrolls against +65,000. Well above or near 29,000 carries different signals.
- Revisions to prior months. These can erase a strong headline.
- Unemployment against 4.2%. Check whether participation drove any change.
- Wages against +0.3% month on month. Firm pay strengthens the hike case.
One report cannot settle everything. The AI worry may be a growth shock rather than a policy shift, and the official BLS data remains the benchmark. Judge Friday by its combination of jobs, wages and revisions, not the headline alone.
For readers wanting to position ahead of rate decisions, our full explainer on positioning around Fed hike odds shows how shortening bond duration affects portfolios.
Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors.
This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.
