EMPLOYMENT SITUATION REPORT DROPS TODAY! Why does it matter?
This report has a significant impact on inflation trends, which directly influence the Federal Reserve’s decisions on interest rate cuts in 2025. And as we know, rate cuts ripple through the stock and crypto markets. Here’s the current forecast (likely priced into the markets already): Nonfarm Payrolls: Expected to rise by ~160,000 jobs in December, down from 227,000 in November. (Source: Reuters)Unemployment Rate: Projected to hold steady at 4.2%. (Source: AP News)Private Sector Employment: Anticipated to add ~135,000 jobs, down from 194,000 in November. (Source: Reuters)Wage Growth: Expected to see a marginal increase, maintaining an annual rise of 4.0%. What’s the theory? If the numbers are worse than forecasted, it might signal slower inflation, which could support the case for lower rates and potentially drive prices higher.If the numbers are better than expected, stronger employment could mean higher consumption, driving inflation up and increasing the likelihood of higher interest rates.The wildcard: Nothing unusual happens, as we’ve already experienced two sell-offs related to this topic in recent weeks. So, what’s next? Keep an eye on the numbers today. Depending on how they compare to the forecast, we could see a pump, a dump, or the market might shrug it off entirely (after all we already lived through 2 selloffs due to that in the last few weeks). Either way, the report sets the tone for what’s ahead in the economy and markets.