The U.S. December employment report, expected to be released today, could provide a clearer picture of the labor market’s current state. Analysts surveyed by FactSet predict a 153,000 increase in non-farm payrolls for December, down from 227,000 in November but significantly higher than the 36,000 in October.
"Goldilocks Balance" for the Fed
Boston College economist Brian Bethune is more optimistic, projecting a 165,000 to 175,000 increase in non-farm payrolls. He described this range as a "Goldilocks balance" for the Federal Reserve, explaining:
Not Too Hot: Numbers within this range would not trigger inflationary concerns.
Not Too Cold: They would avoid signaling an economic downturn.
Bethune added: “Fed Chairman Powell will regard this number as a relief, as it reflects steady job growth without overheating the economy.”
Implications for the Federal Reserve
If the actual employment figures align with Bethune’s forecast, it could provide the Federal Reserve with a stable foundation for its next policy decisions, easing inflation worries while signaling economic resilience.