Goldman Sachs' outlook on non-farm payrolls: Data needs to be "significantly unexpected" to shake the Fed's April rate cut expectations

BlockBeats News, January 9 — Goldman Sachs stated that the upcoming release of the US December 2025 non-farm payroll report on Friday evening is unlikely to materially change market expectations for Federal Reserve policy unless the data shows a significant surprise, as current market pricing is firmly anchored on a path of easing policy starting mid-year.

In a research report to clients, Goldman Sachs estimates that the non-farm payroll increase will be around 70,000 jobs, which is in line with general expectations. Although informal market “private forecasts” suggest a slight upside risk, the bank believes that an outcome close to expectations will reinforce rather than disrupt the existing macroeconomic narrative.

The market currently prices in two 25 basis point rate cuts by the Federal Reserve this year, with the first 25 basis point cut expected around late April.

Goldman Sachs states that only a “dramatic” upside or downside surprise in labor data would significantly shift this timing forward or backward.

From a market perspective, Goldman Sachs describes non-farm payrolls in the 70,000 to 100,000 range as the most favorable outcome for stocks, consistent with a scenario of continued economic expansion that neither reignites inflation concerns nor threatens the easing cycle. Such a result would support the view that the US economy is gradually slowing rather than suddenly stalling.

In contrast, if non-farm payrolls fall below 50,000, it would be interpreted as below the estimated level needed to maintain stable employment growth, potentially causing investor concern over a sharp slowdown in growth.

Another extreme is that Goldman Sachs states if the data exceeds 125,000, it could prompt the market to reassess the timing of the Fed’s first rate cut, pushing expectations of rate cuts back to June. (Jin10)