December Jobs Preview: The Rebound Continues

December nonfarm payrolls are expected to print in line with the prior report, with the consensus looking for 70k nonfarm payrolls to be added to the economy vs the 64k in November. The unemployment rate is expected to fall by one-tenth to 4.5%, and follows the Fed's decision in December to cut rates due to the slowing labor market. The December jobs data will help shape expectations for the January and March FOMC meetings; currently money markets are pricing an unchanged outcome in January (with around 80% probability), and there is around 48% chance rates will have been cut by a further 25bps by March. According to Newsquawk, labor market proxies in December have generally printed similar figures to the November period; weekly initial jobless claims were little changed across the two survey windows; continuing claims eased but there might be some distorting factors; ADP printed a positive figure vs the negative reading in November, but was short of expectations; the Conference Boardʼs gauge of consumer confidence signaled a softer labor market vs November. JPMorganʼs strategists suggest that the data would be received positively by stocks if the headline came in between 0-105k, but could see some downside outside of that range.

Expectations