The number of new jobs in the US is showing moderate growth. How will the markets react?
The number of new jobs in the US private sector increased by 41,000 in December last year after a decline of 32,000 in November, and wages rose by 4.4% compared to the same period last year, according to ADP's monthly employment report. These figures were lower than the forecasts of economists surveyed by Reuters, who expected an increase of 47,000 in the number of private sector employees in the US during this period.
"Small businesses have recovered from November's job cuts, showing positive hiring at the end of the year, while large employers are scaling back their operations," noted ADP Chief Economist Nela Richardson.
Bloomberg notes that ADP data indicates moderate employment growth in December and sluggish dynamics in the US labor market ahead of 2026.
S&P 500 futures remained virtually unchanged after the ADP report was released (on Tuesday, January 6, the index reached a new high). European stocks also traded virtually unchanged. Nasdaq 100 contracts fell 0.1%. The rise in US Treasury bond prices accelerated, according to Bloomberg. The yield on 10-year bonds fell by five basis points to 4.12%.
Context
Representatives of the US Federal Reserve have previously stated that employment figures are a priority factor for them when making decisions on interest rates. Currently, markets are forecasting two rate cuts in 2026, with market participants estimating the probability of a third cut by December at less than 50%.
On Friday, December 9, the ADP report on nonfarm payrolls in the US is expected to be released. Reuters notes that analysts expect it to show a decline in the US unemployment rate in December 2025 to 4.5% from 4.6% in November. The agency notes that such data should theoretically confirm the assumption that interest rates do not necessarily have to fall sharply in the near future.
Investors, the agency notes, are awaiting reliable labor market data following the longest government shutdown in US history at the end of 2025.
"The weakening labor market has been a key factor in prompting the Fed to ignore inflation risks... further weakening will support expectations of interest rate cuts, while higher-than-expected figures could quickly revive supporters of tight monetary policy," Swissquote Bank senior analyst Ipek Ozkardeskaya noted in a comment to Reuters. "However, the inflation component remains unclear," she continued, "as recent publications... have not given a clear signal about price dynamics. If inflation unexpectedly accelerates, expectations of interest rate cuts may be quickly revised."
This article was AI-translated and verified by a human editor
