【Non-agricultural forecast】December Non - Farm Employment Report Outlook — In-depth Analysis of Mark

Non-agricultural forecast outlook

At present, the market predicts that the median number of new non-farm payrolls in the United States in December will be 160,000 , a decrease from 227,000 in November, and the unemployment rate is expected to remain at around 4.2%. The year-on-year growth rate of average hourly wages is also expected to remain at 4%.

(1) Non-farm data released was lower than expected: the weak US job market is bad for the dollar and good for gold ;

(2) Non-farm data exceeded expectations: the US job market is good, bullish for the US dollar and bearish for gold .

Interpretation of non-agricultural forecast

Looking back at past non-farm data, the US non-farm data in September was strong, with 254,000 new jobs and the unemployment rate falling to 4.1%, while the number of new jobs in October was only 12,000, and the unemployment rate was the same as the previous value, also at 4.1%. Against this background, the Fed's policy direction is still wavering, and they emphasize that the path of interest rate cuts must be “data-driven”.

However, in recent weeks, market concerns about Trump's potential policies and the inflation that may be triggered have begun to spread, causing turmoil in the bond market . This Thursday, the New York Stock Exchange will be closed for one day in memory of the late former President Carter, which means that the US market will usher in a short trading week for the third consecutive week.

This week may be extremely important for the market to start the year. Wall Street traders will pay close attention to Friday's December non-farm report, hoping that it will show that the US job market is stable but not overheated, providing support for the rise of the stock market in 2025. Industry insiders generally believe that whether the US stock market can perform well for the third consecutive year depends in part on the performance of the US economy in the new year, and labor market data is one of the key indicators to measure the health of the economy.

Non-agricultural policy impact

The new US Congress is about to officially take office , and according to the schedule, US President-elect Trump will be sworn in on January 20. Against the backdrop of Trump's upcoming inauguration, if the December non-farm report shows a strong labor market, Trump may be more confident in implementing his economic policies. These policies may have new impacts on the US labor market, inflation levels and economic growth, thereby increasing the complexity and uncertainty of the Fed's decision to cut interest rates.

Divisions within the Republican Party could threaten Trump's agenda of lowering taxes, increasing tariffs and restricting immigration. The Federal Reserve will release minutes from its December meeting this week. Investors have lowered their expectations for a U.S. interest rate cut in 2025, with Trump's proposals likely to put upward pressure on inflation. U.S. money markets are pricing in just over 40 basis points of rate cuts this year, the equivalent of just two.

Market dynamics before non-farm payrolls

Although the U.S. market sentiment was high last Friday, for most of the time after Christmas, traders have converged the strong risk appetite that dominated the market for most of 2024, and the volatility of U.S. bonds and corporate credit assets has quietly increased; the stock market has also suffered one of the worst year-end declines in history; the spot ETFs of Bitcoin, which are loved by global speculators, have also experienced the worst capital outflows in history.

Although there has been no obvious panic in the US market, the market trend has revealed a cautious attitude that has not been seen in the past year, especially in risky assets. Last year, the strong performance of the US economy and the loose policy of the Federal Reserve were the key factors that drove all kinds of risky assets to soar almost straight. However, in recent weeks, market concerns about Trump's potential policies and the inflation that may be triggered have begun to spread in the hedge market, and the bond market has continued to be turbulent after the 10-year US Treasury yield recorded the largest quarterly increase in more than two years.

Industry insiders generally believe that whether the U.S. stock market can perform well for the third consecutive year depends in part on the performance of the U.S. economy in the new year, and labor market data is one of the key indicators of economic health. The Federal Reserve lowered its expectations for the number of interest rate cuts in 2025 at its December interest rate meeting, surprising the market. The latest data may help further clarify the Fed's interest rate plan.