The inflation story might have stolen the spotlight for quite a while in the past two years but come what may, there’s nothing quite like the US non-farm payrolls data. And now with the focus on the Fed outlook shifting back to the labour market, the report today will once again draw plenty of eyes and attention from markets across the globe.
The November report was marred by data quality concerns following the longest US government shutdown in history. And it also came after the final FOMC meeting for 2025, so market players could easily brush that aside.
But today, this will be the first “normal” jobs report after the whole shutdown debacle. As such, expect there to be heavier scrutiny as market players will look to dissect the numbers to tie that to the Fed’s next move.
As a reminder, the next FOMC meeting will take place on 28 January. As things stand, traders are pricing in ~86% odds of there being no change to the Fed funds rate. The next full 25 bps rate cut is only pried in for June currently.
Circling back to the labour market report today, the Reuters estimate points to a 60k print for the headline non-farm payrolls. The unemployment rate is expected to marginally ease to 4.5% while average hourly earnings is estimated to be up 0.3% month-on-month.
So, those are some of the more important numbers to watch out for.
That being said, just be mindful that there could still be some distortions to the report. I highlighted the potential for that yesterday here and I’ll put up more previews in the session ahead as we gear towards the main event for the day.
Earlier today, Eamonn posted this one from Goldman Sachs. So, you can just take a read first as we settle into European morning trade.
Besides the non-farm payrolls, there’s also the US Supreme Court ruling on tariffs potentially coming up later in the day. The court is expected to issue rulings on Friday but, as is customary, has not said what case or cases will be acted upon. However, Trump’s tariffs will be one thing to watch in case it does draw mention.
