Standard Chartered economists have confirmed that recent payroll data weakness was largely driven by temporary government disruptions rather than broader economic deterioration. Dan Pan and Steve Englander point to newly released Quarterly Census of Employment and Wages data that validates the softer Nonfarm Payrolls readings from late 2025, attributing the weakness primarily to federal government shutdown effects and layoffs from DOGE initiatives.
The QCEW data, which provides a more comprehensive employment picture than the monthly NFP survey, suggests the jobs market downturn was more concentrated in public sector disruptions than previously feared. This validation indicates private sector employment remained more resilient during the period than headline NFP figures suggested, potentially easing concerns about labor market deterioration that had weighed on sentiment.
Traders and asset managers should note the revised employment narrative could support risk appetite and reduce expectations for aggressive Federal Reserve easing.
FXnCO Insight
The narrowing gap between QCEW and NFP data reduces downside economic risks and may prompt dollar strength as markets price out excessive rate cut expectations.
Source: FXStreet