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(Reuters) – A look at the day ahead in Asian markets. Investors in Asia approach the end of a bumpy week hoping that the relative calm that descended on the dollar and a shortened U.S. bond market session on Thursday can extend into the local session on Friday.With the December U.S. employment report looming large and markets still feeling the whiplash from the surge in global long-term bond yields this week, trading in Asia may end up fairly range-bound and subdued.Nikkei futures are pointing to a flat open for Japanese stocks. The Nikkei is on track for a decline of around 0.7% on the week, underperforming the wider MSCI Asia ex-Japan index, which goes into Friday’s session flat on the week.Chinese stocks are also looking to end the week unchanged and unscathed. That can be interpreted two ways, however. It’s welcome news, given the doom and gloom that continues to surround the outlook for China in the eyes of many investors.On the other hand, Chinese stocks tumbled more than 5% the week before, their worst week in more than two years. In that light, failure to stage even a modest rebound the following week is a pretty ominous sign.It’s been a difficult start to the year for China bulls. Stocks are significantly lagging their regional and global peers, the bond yield collapse has been alarming, and uncertainty around a possible trade war with the U.S. is cutting deep.According to Goldman Sachs, financial conditions in China are the tightest since last April. Across emerging markets more broadly they are the tightest since November 2023. China’s latest inflation figures on Thursday weren’t particularly encouraging either. Consumer and producer prices for December were broadly in line with forecasts, cementing the view that deflationary pressures are not lifting any time soon.Economists at Barclays (LON:BARC) slashed their already weak 2025 CPI forecast to 0.4% from 0.8%, and they expect PPI inflation to remain in deflation throughout 2025. That would mark more than three years of falling factory gate prices. And it could get even worse if the incoming Trump administration in Washington follows through with its aggressive tariff threats.”We think a new trade war between China and the US would, on balance, have a deflationary effect, given downward pressure on exports would exacerbate the overcapacity issues in China,” they warned. The regional calendar is light on Friday, with the latest Japanese household spending figures most likely to move markets. Investors will be looking for early signs that recent wage agreements in Japan – the highest in decades – are beginning to lift consumer spending.The Bank of Japan said on Thursday that wage hikes are broadening across the country, suggesting that conditions for a near-term interest rate hike may be in place.Here are key developments that could provide more direction to markets on Friday:- Japan’s household consumption (November)- India industrial production (November)- Malaysia industrial production (November) More
Economists expect the Bureau of Labor Statistics to report a gain of 155,000 in nonfarm payrolls in December, a step down from the surprising 227,000 increase in November.
Details of the report will be key, with some on Wall Street expecting that the number could come in a bit weaker than the consensus.
Goldman Sachs, for one, estimates that payroll growth will come in at just 125,000, with the unemployment rate drifting up to 4.3%.
Signage at the New York Public Library’s annual Bronx Job Fair & Expo at the Bronx Library Center in the Bronx borough of New York, US, on Friday, Sept. 6, 2024.
Yuki Iwamura | Bloomberg | Getty Images
The December jobs report is likely to provide only limited clarity on where the labor market is headed, with experts differing on how pronounced a slowdown there is in hiring.
From a consensus view, economists expect the Bureau of Labor Statistics on Friday morning to report a gain of 155,000 in nonfarm payrolls, a step down from the surprising 227,000 increase in November but about in keeping with the four-month average. The unemployment rate is forecast to hold steady at 4.2%.
However, the details of the report will be key, with some on Wall Street expecting that the number could come in a bit weaker, depending on how seasonal trends and other factors play out.
“We’ve seen a little bit of the softening, and I think we’ll continue to see that, but it’s still a good [labor] market overall,” said Maureen Hoersten, chief operating officer and interim CEO at LaSalle Network, a Chicago-based staffing firm. “Things are leveling off a little bit. People are still a tad cautious, trying to figure out this new year and the new economic climate and political climate.”
On average, the economy in 2024 added about 180,000 jobs a month through November, though the data has been volatile and somewhat confusing lately. Federal Reserve Governor Michelle Bowman said Thursday that labor market reports “have become increasingly difficult to interpret” due to measurement challenges, which have included a surge of new workers and low response rates on surveys.
The December report also could be harder to judge depending on how the hiring of holiday workers affects the numbers.
Goldman Sachs, for one, estimates that payroll growth will come in at just 125,000, with the unemployment rate drifting up to 4.3%.
“Our forecast reflects a rebound in the labor force participation rate and middling household employment growth amid more challenging job-finding prospects,” the Wall Street bank said in a note. “We expect deceleration in job growth in non-retail sectors, particularly professional services and construction, to more than offset stronger retail hiring this month.”
Similarly, Citigroup is predicting just 120,000 new jobs and a 4.4% unemployment rate, which economist Andrew Hollenhorst wrote “should remind markets that the labor market has not stabilized and is continuing to soften. Risks are balanced to an even softer reading.”
However, Hoersten said she thinks that once some of the current volatile factors subside, companies will continue adding head count, even if at a gradual rate. A Bureau of Labor Statistics report Tuesday put job openings in November at a six-month high of just over 8 million, while layoffs were little changed and the quits rate, a measure of worker mobility, declined.
At the Federal Reserve’s December meeting, officials noted an “ongoing gradual easing in labor market” conditions, but saw “no signs of rapid deterioration,” according to minutes released Wednesday.
In a recent business survey, LaSalle Network found that 67% of small and midsize companies plan to increase head count in 2025, down from 74% the year before. The survey also found that salary increases are expected to be smaller and hybrid working is likely to remain prevalent as a wedge to compete against larger companies for workers.
Average hourly earnings are expected to show a 0.3% increase in December and an annual rate of 4% from a year ago, little changed from November.
“Right now, I think things are just going to stay fairly flat overall, nothing drastic one way or the other,” Hoersten said. “But I do believe it’s still a good, strong market, and companies just needed to get past the little bit of a crazy climate over the past couple months and get back to the steady state.” More
Amanda Critchfield, a spokesperson for the Finance Committee’s new Republican chair, Senator Mike Crapo, said a hearing date has not been officially set, adding: “Senator Crapo is committed to moving Bessent’s nomination as quickly as possible.”Trump chose hedge fund investor Bessent as his Treasury secretary in November after a dramatic battle among prominent financiers for the coveted position that wields vast influence over U.S. economic, tax, regulatory and international affairs.Bessent faces a number of challenges, including rising bond yields that will make it more difficult to manage a $36 trillion federal debt load that is forecast to grow by nearly $8 trillion over a decade if Trump’s tax cut plans are implemented without offsetting savings.The founder of Key Square Capital Management also will need to maintain financial stability as Trump imposes steep tariffs on U.S. imports that threaten to disrupt supply chains and trade relations with allies and adversaries alike. But Bessent has argued that Trump’s agenda will unleash stronger economic growth and revenue, shoring up market confidence. More
SAO PAULO (Reuters) – Brazil’s President Luiz Inacio Lula da Silva may change officials in his cabinet before a meeting with ministers schedule to Jan. 21, Chief of Staff Rui Costa said on Thursday. In an interview with TV channel GloboNews, Costa said that the only change decided on so far was that of Lula’s spokesman, announced on Tuesday, but other swaps could come in the following weeks. More
Hiring has slowed, but joblessness remains at levels defying economic norms. Big policy changes under a new administration could test that resilience.For a time, not too long ago, it was the central question animating economic forecasts and bets laid by investors in financial markets: Will the U.S. economy avoid a recession?Now, for many in the business world, that question feels almost passé, part of an earlier, more fretful era of narratives.After a superlative run of hovering below 4 percent for more than two years, the unemployment rate — at 4.2 percent — has ticked up since last spring. But only by a bit so far; the December reading will come on Friday. While hiring has slowed, layoffs remain low by long-term standards.Inflation, having calmed substantially, is still being eyed warily by the Federal Reserve, which began steeply raising interest rates in 2022 to combat price increases. But at three consecutive meetings in the final months of 2024, the Fed slightly lowered the key interest rate it controls — an attempt to surgically take some pressure off commercial activity and support employment.Predictions of a downturn, once omnipresent, were mostly absent from the year-ahead forecasts that major financial firms typically send around to clients over the holidays.Near the start of 2024, Jeremy Barnum, the chief financial officer at JPMorgan Chase, told listeners asking about U.S. economic vitality during a conference call, “Everyone wants to see a problem — but the reality is we aren’t seeing any yet.”
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Unemployment rate
Note: Data is seasonally adjustedSource: Bureau of Labor StatisticsKarl RussellWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More
$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More
