December US Jobs Report to Cap Year of Moderate Hiring

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(Bloomberg) — U.S. employers may have eased hiring last month to end a year of moderate but healthy job growth that economists expect to continue into 2025.

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Payrolls rose by 160,000 jobs in December, when the labor market weathered distortions from hurricanes and strike activity in the previous months, according to the median forecast of economists surveyed by Bloomberg. That would put average monthly job growth near 180,000 for 2024 — lower than the previous three years but consistent with a flat job market.

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Friday’s monthly jobs data is unlikely to change Federal Reserve officials’ view that they can slow the pace of interest rate cuts amid a solid economy and inflation that is only gradually dissipating. Investors on Wednesday will analyze the minutes of the Federal Reserve’s December meeting to gain additional insight into how torn policymakers are on a quarter-point rate cut. At the time, Cleveland Fed President Beth Hammack was the only dissenter.

Meanwhile, the unemployment rate is expected to remain steady at 4.2%, and average hourly earnings growth is expected to slow slightly from the previous month – consistent with a labor market that is no longer a source of inflation.

A separate Labor Department report on Tuesday is expected to show little change in job openings for November compared to the previous month. The number of job vacancies is about one million higher than at the end of 2019, while the ratio of job vacancies per unemployed person is in line with its pre-pandemic level.

What Bloomberg Economics says:

“The consensus on Wall Street is that US economic exceptionalism will continue in 2025. Nonfarm payrolls will add fuel to such talk. We expect December’s headline reading to be a blowout, with most sectors showing improvement in hiring. Some of that may be a reversal Continuing from the weak hurricane-impacted October reading – something that will not last we also expect employment to stabilize and unemployment claims to remain low.

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—Anna Wong, Stuart Ball, Eliza Wenger, Estelle Au and Chris J. Collins, economists. For the full analysis, click here

A number of US central bankers will appear at public speaking events next week, including Federal Reserve Governors Lisa Cook on Monday and Christopher Waller on Wednesday.

• For more, read next week’s full US report from Bloomberg Economics

In Canada, December jobs data will be published after the unemployment rate jumped to 6.8% the previous month. The merchandise trade report will show whether Canada’s economy is still in deficit with the world, despite a surplus with the United States that is a source of anger for President-elect Donald Trump.

Elsewhere, several major economies will release inflation data, with China likely to be close to deflation and the Eurozone to see a slight rise.

Here’s a summary of what will happen in the global economy for the first full week of 2025.

Asia

Inflation data will dominate, giving investors clues about future monetary policy moves.

Australia is expected to reveal a slight rise in inflation on Wednesday – although the focus will be on the Reserve Bank of Australia’s preferred measure, which will likely slip back into policymakers’ target range of 2%-3%.

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On Thursday, China is likely to announce that its consumer price index was close to contraction in December while its producer price index continued to contract, a sign that a raft of government stimulus measures have not done enough to boost demand. Thailand and the Philippines will also publish inflation figures during the week.

The Indian government will release its economic growth estimates for the current fiscal year on Tuesday, as concerns grow about weak consumer spending. Friday’s industrial production data will give investors more clues about the growth outlook.

In Japan, Thursday’s data is likely to show a rise in wage growth.

• For more, read Bloomberg Economics’ full report on next week for Asia

Europe, Middle East, Africa

Inflation will be the main topic across Europe this week. Data in the euro zone on Tuesday is likely to show a slight acceleration in price growth in December, above the European Central Bank’s 2% target.

This reading, which was fueled by rising fuel prices, will arrive simultaneously with the numbers coming from Italy and after reports coming from France and Germany during the previous 24 hours. Each of these three economies is expected to experience faster inflation.

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The European Central Bank’s measure of consumer price expectations will also be published on Tuesday. A few public appearances by officials are scheduled.

Elsewhere in the euro zone, factory orders and industrial production will be released in Germany on Wednesday and Thursday respectively, each offering the latest glimpse into the weak health of manufacturing in the region’s largest economy. France and Spain will publish equivalent production figures on Friday.

Swiss inflation, scheduled for Tuesday, may show further weakness which could pressure policymakers to cut interest rates again this year. Economists expect a 0.6% result for December.

Swedish inflation – which has also slowed – will be released the next day, while consumer price data from Norway and Denmark are due on Friday.

• For more, read next week’s full Bloomberg Economics EMEA report

Two critical decisions are scheduled to be made in the wider region:

• The Central Bank of Israel is likely to keep the key interest rate at 4.5% on Monday. Although growth slowed due to the wars against Hamas and Hezbollah over the past year, the inflation rate, which reached 3.4%, remains higher than the government’s target level of 1% to 3%.
• On Wednesday, Tanzania may cut the interest rate from the current level of 6%, believing that the 12% appreciation of the shilling against the dollar in the past three months is likely to keep prices in check.

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latin america

By the end of the week, all of the region’s major central banks will have their final inflation scores for 2024 – and all of the central banks, except Peru, will have failed to meet their target again.

Colombia is likely to see its 19th month of lower inflation since March 2023, although consumer prices are unlikely to drift further than just down slightly from 5.2%. Also in Mexico, consumer prices are likely to calm for the fourth month in five months, from 4.55%.

By contrast, consumer prices in Chile are likely to accelerate for the seventh month in nine months, from 4.2%, while prices in Brazil are close to 5%, far from their 3% target, as economic activity overheats.

Brazilian industrial production and retail sales have been well above trend since May, although November readings are expected to begin to lose ground under the weight of tighter financial conditions.

Peru’s central bank meets on Thursday and early consensus calls for a quarter-point cut to 4.75%. Banxico and the Central Bank of Chile publish minutes of their December meetings, alerting investors to any shifts in expectations or guidance.

Chile at 5% is close to its expected final rate of 4%, while Banxico at 10% is expected to be 500 basis points below its potential Q1 2027 end of 5%.

• For more, read the full Latin America Week from Bloomberg Economics

—With assistance from Monique Vanek, Nasreen Seria, and Robert Jameson.

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