Economists expect December’s non-farm payrolls to soften as compared to November in Friday’s official monthly jobs report, to be released by the Bureau of Labor Statistics at 8:30 a.m. ET.
What Happened: December’s job report will be “the first clean monthly employment report after October,” said Ed Yardeni and Eric Wallerstein in their weekly economic report, adding that October witnessed hurricanes and strikes, and November’s jobs were boosted because of the returning workers.
Along with the employment report, other data to be announced on Friday include December’s unemployment rate and annual hourly wages report by 8:30 a.m. ET. The preliminary consumer sentiment data for January will be announced at 10:00 a.m., ET.
TradingEconomics compiled economist consensus expects nonfarm payrolls to show a net gain of 154,000 jobs in December, down sharply from the 227,000 added in November. On the other hand, Bloomberg’s consensus estimate stands at 165,000 jobs.
The principal and chief economist at RSM US, Brusuelas expects 180,000 new jobs in December and a 4.2% unemployment rate.
However, according to Yardeni Research’s report, “December’s employment report should show payrolls rose between 175,000-200,000 to a new record high,” as it considers December to be a normal month without disruptions. They expect the gain in payroll employment to average around 200,000 per month by January.
The unemployment rate is projected to hold steady at 4.2%, and average hourly earnings are anticipated to increase by 0.3% month-over-month.
Additional hiring is likely with Trump 2.0 due to potential new policies, like deregulation and lower corporate taxes, along with increased certainty after the election, added Yardeni.
See Also: Charlie Munger’s Top Pick Costco Reports Strong December Sales: Analysts Expect A 7% Jump In January
Why It Matters: Alessandro S., the global market strategist and financial analyst at Macro Mornings said that the Fed has a dual mandate to achieve maximum employment and stable prices. “This means that in addition to controlling inflation, the Fed also aims to promote job creation and economic growth.”
A weaker-than-expected jobs report on Friday could boost U.S. stocks, weaken the dollar, and lower government bond yields, as investors might see it as an indication that the Fed has room to ease monetary policy.
Conversely, stronger-than-expected job growth or a lower unemployment rate could raise concerns about a robust labor market, potentially delaying the Fed's timeline for easing.
The stock markets closed mixed on Wednesday in the truncated trading week. Treasury yields have recently spiked and the 10-year yields rose to 4.73% in Wednesday’s session, the highest since April 2024. Whereas, the 30-year yields neared a key 5% mark. All attention is now on jobs report, set for release today.
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