This week, the US job market will be in the spotlight as worries mount that the economy may be losing steam. The first relevant release will be on Wednesday with the ADP Employment Change, which is expected to show that the private sector added 40K jobs in March, marking a slowdown compared to the 63K in February.
Economic worries have been growing amid weaker GDP signals and some less optimistic underlying statistics, while there is still uncertainty about the impact of US tariffs and the Middle East crisis.
The first important check-in is on Wednesday, when the ADP Research Institute issues its March Employment Change report. This data gives an early look at how many people are being hired in the US private sector.
The ADP data is best considered as a general guide rather than an exact forecast, even though it usually comes out a few days before the official Nonfarm Payrolls (NFP) report. It may give you an idea of where the job market is going, but it doesn’t always match up perfectly with the Bureau of Labour Statistics numbers.
Under pressure: Employment, inflation, and Fed strategy
Employment sits at the core of the Federal Reserve’s (Fed) dual mandate, alongside price stability, and right now, it is back in focus.
With inflation proving stubborn, attention has shifted toward the US labour market following the Fed’s hawkish stance at its March 18 meeting. At the same time, investors are watching developments in the Middle East conflict, particularly its impact on energy prices and thus future inflation.
This week’s labour market data take on added importance against the backdrop of tariff uncertainty, signs of slowing growth, and still-elevated inflation. The ADP report will provide an initial indication, but the focus will be on Friday’s Nonfarm Payrolls, which could play a crucial role in determining expectations for the Fed’s next move.
When will the ADP report be released, and how could it affect the US Dollar Index?
The ADP Employment Change report for March will come out on Wednesday at 12:15 GMT. Predictions are for a slight rise of around 40K jobs after February’s mild growth of 63K jobs.
The US Dollar Index (DXY) is still strong as it heads into the release, trading at levels last seen in May 2025. This is because the market is wary because of continued tensions in the Middle East.
If the ADP report is higher than expected, it might help assuage worries that the economy is slowing. On the other hand, another lower-than-expected print would likely make markets even more worried about a slowdown, which may make the Fed more inclined to cut rates down the road.
Pablo Piovano, Senior Analyst at FXStreet, explains that if bullish momentum picks up pace, the US Dollar Index (DXY) should initially retest its year-to-date ceiling of 100.64 (March 31). Once this level is cleared, the index could attempt a test of the May 2025 high at 101.98 (May 12) ahead of the weekly top at 104.68 (March 26).
“On the flip side, the breach below the key 200-day SMA at 98.41 should expose a potential retracement to the February base at 96.49 (February 11) prior to the 2026 bottom at 95.55 (January 27),” Piovano adds.
“Momentum indicators continue to prop up the ongoing recovery, with the Relative Strength Index (RSI) above the 58 level and the Average Directional Index (ADX) around 35, suggesting a robust trend,” Piovano concludes.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Economic Indicator
ADP Employment Change
The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Next release:
Wed Apr 01, 2026 12:15
Frequency:
Monthly
Consensus:
40K
Previous:
63K
Source:
ADP Research Institute
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