Tonight at 21:30, the December 2025 Non-Farm Employment Report will be released as scheduled, making it the most eye-catching macroeconomic data at the start of 2026. Changes in non-farm employment, unemployment rate, and hourly wage growth are interconnected and directly influence the Federal Reserve's subsequent monetary policy decisions, as well as market perceptions of a soft landing for the US economy.

Currently, the US labor market is showing signs of cooling. These data points make it clear—November added 64,000 jobs, while October surprisingly decreased by 105,000. The unemployment rate rose to 4.6% in November, up from 4.4% in September, the highest level since 2021. Notably, the plunge in employment in October was the largest since the end of 2020, mainly due to a federal government employment cut of 162,000 jobs, which were workers officially leaving through buyout and resignation programs.

How does the market view December now? The general expectation is around 60,000 new jobs, with the unemployment rate slightly falling back to 4.5% or lower. This is mainly due to technical factors, such as federal employees being reclassified on the list. If employment data shows a modest slowdown in the labor market without signs of a collapse, the Fed is likely to hold steady at the January meeting. After a series of rate cuts, any move in January would be more challenging, and the market's probability of holding steady has already risen to 88.4%.

But the real focus of this report is not the employment number, but the unemployment rate—listen to what Powell said. At the December FOMC meeting, he admitted that official data might overstate about 60,000 jobs per month. So the key question is: can the unemployment rate in December fall below 4.5%? If the unemployment rate remains at 4.6% or higher, it will trigger the so-called Samuelson's Law, which is seen as a recession signal and could easily trigger market panic and increased stock market volatility. Conversely, if the unemployment rate drops below 4.5%, this risk can be avoided, boosting market confidence.