The December jobs report is expected to show hiring slowed in the final month of 2024 while the unemployment rate was flat.
The Bureau of Labor Statistics' monthly jobs report is slated for release at 8:30 a.m. ET on Friday. Economists expect nonfarm payrolls to have risen by 165,000 in December while the unemployment rate held steady at 4.2%, according to consensus estimates compiled by Bloomberg.
In November, the US economy added just 227,000 jobs as the labor market rebounded from several weather disruptions and worker strikes that impacted prior reports. Meanwhile, the unemployment rate increased to 4.2% from 4.1% during the month.
"We think job growth in December will be much softer than November's 227,000 print because the latter included payback for October's hurricane disruptions, particularly in manufacturing," Bank of America Securities US economist Shruti Mishra wrote in a note to clients. "Investors should also keep an eye on revisions, which have been large in recent months due to low response rates."
With investors already pricing in just a 5% chance the Federal Reserve cuts interest rates at its January meeting, Mishra argued that a print about in line with consensus "would seal the deal" for the Fed to pause its interest rate cuts.
Here are the key numbers Wall Street will be looking at on Friday, according to data from Bloomberg:
Recent data has shown the labor market slowing but not rapidly deteriorating , as layoffs remain low.
New data from the Bureau of Labor Statistics released Tuesday showed there were 8.1 million jobs open at the end of November, an increase from the 7.84 million seen in October and the highest level of job openings since May 2023.
But there were also signs of cooling within the report. The Job Openings and Labor Turnover Survey (JOLTS) also showed the hiring rate fell to 3.3% from 3.4% in October. The quits rate, a sign of confidence among workers, fell to 1.9% from 2.1% in October.
On Wednesday, Data from ADP Wednesday morning showed 122,000 private payrolls were added in December, down from the 146,000 additions seen in November.
"There's not a lot of wiggle room in this jobs market still, because it's almost like it's in a quiet period," ADP chief economist Nela Richardson told Yahoo Finance. "There's just not a lot of movement. So if you're a job seeker, it's harder to find that opening."
At large, the Federal Reserve has reiterated that it isn't looking for further cooling in the labor market to achieve its goal of bringing down price increases.
"We don’t think we need further cooling in the labor market to get inflation down to 2%," Fed Chair Jerome Powell said on Dec. 18.
Given the recent surge in the 10-year Treasury yield ( ^TNX ) to nearly 4.7% has put pressure on stocks in recent trading sessions, a key debate among investors is how the data will impact rates and whether the market would positively receive a strong labor print on Friday.
Strategists at Bank of America believe the market has shifted back to a "good news is bad news" phase for economic data, where a strong employment report pushing rates higher could weigh on stocks on Friday.
But from a longer-term perspective, State Street Global Advisors' Michael Arone believes investors shouldn't worry if Friday's jobs report is strong and points to fewer Fed rate cuts.
"As long as the economy is growing and earnings are growing, I think we can continue to move higher," Arone told Yahoo Finance . "I wish that the market would come around to that view. We'll see if they do in the coming days and weeks."
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer .
