TechFlow news, January 10 — According to Jinshi Data, a research report from Huatai Securities stated that the U.S. added 50,000 nonfarm jobs in December, below Bloomberg's consensus forecast of 70,000, with cumulative downward revisions of 76,000 for October and November. Although the unemployment rate declined slightly, the significant downward revisions over the previous two months brought the three-month average of private-sector nonfarm payroll gains down to a low level of 29,000, with further deterioration in structural balance. Looking ahead, we maintain our view that the labor market will gradually improve, and highlight the "temperature gap" between economic growth and employment. We expect the Fed to pause rate cuts from January to May, resuming 1–2 rate cuts only after the new Fed Chair takes office. December’s nonfarm payroll gain missed expectations and was concentrated in only a few sectors. The employment diffusion index declined in December compared to November. However, given that recent initial jobless claims have mostly come in better than expected, layoff numbers have receded, and leading indicators such as NFIB business hiring intentions continue to improve, we still anticipate a rebound in U.S. nonfarm payrolls going forward. Attention should remain on the "temperature gap" between U.S. economic growth and the labor market. From the Fed's perspective, although labor data are soft, they have not continued to deteriorate. We expect the Fed to hold off on rate cuts at its January meeting, emphasizing the need to assess incoming data before making further decisions. Therefore, we project the Fed will pause rate cuts from January to May, resuming 1–2 cuts after the new Fed Chair is in place.
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