Group 1 - The U.S. labor market showed signs of weakness, with only 50,000 new jobs added in December 2025, and a total of 584,000 jobs created throughout the year, marking a significant decline from the 2 million jobs added in 2024, the weakest performance since the early 2000s excluding recession years [1] - Moody's chief economist Mark Zandi attributed part of the labor market stagnation to the tariff policies implemented by former President Trump, indicating that these tariffs have directly impacted employment in manufacturing, transportation, distribution, and agriculture sectors [1] - The uncertainty in hiring decisions among businesses is exacerbated by rising costs and squeezed profit margins due to tariffs, leading to a more cautious approach in recruitment and investment decisions [2] Group 2 - The manufacturing sector has lost approximately 70,000 jobs in recent months, with other trade-related industries such as mining, logging, and warehousing also experiencing significant job losses [2] - Healthcare and social services remain among the few sectors still hiring steadily, suggesting that without these industries, the employment data for 2025 would be even worse [2] - The upcoming Supreme Court ruling on tariff policies is critical, as it may affect the legality of certain tariffs, but other tariffs imposed through different legal means may continue to pose a threat to the global trade system [3]

Core Viewpoint - The recent U.S. non-farm payroll data presents a mixed picture, with a decline in unemployment and an increase in average hourly wages, but disappointing job growth, leading to a complex market reaction regarding interest rate expectations and supporting gold and silver prices amid geopolitical tensions [1][2][3]. Group 1: Non-Farm Payroll Data Analysis - The U.S. non-farm payroll data for December showed an increase of only 50,000 jobs, below the expected 60,000, while the unemployment rate fell to 4.4%, lower than the anticipated 4.5% [3]. - The total job growth for 2025 was only 584,000, marking the weakest annual growth since 2020, indicating a persistent weakness in the labor market [2][3]. - The downward revision of job data for October and November by a total of 76,000 further exacerbates concerns about the labor market's structural weaknesses [1][3]. Group 2: Market Reactions and Trends - Gold and silver prices have been rising due to the mixed non-farm data and ongoing geopolitical tensions, particularly in the Middle East, which has heightened market risk aversion [1][2]. - Central banks continue to increase their gold reserves, with a reported increase of 0.93 tons in December, indicating strong demand for precious metals [2]. - The upcoming release of the December CPI data is crucial, as a lower-than-expected core CPI could further support precious metal prices by reinforcing expectations of continued monetary easing [2][3]. Group 3: Geopolitical and Economic Factors - Geopolitical developments, particularly in Iran and the broader Middle East, are driving market sentiment and influencing the strong performance of precious metals [1][3]. - The expectation that the Federal Reserve may not need to tighten monetary policy further due to weak job growth and a declining unemployment rate is providing additional support for gold [4]. - The potential impact of the Supreme Court's decision regarding tariffs on precious metals could introduce short-term volatility, necessitating caution among investors [2].

Group 1 - The average monthly job growth in the U.S. dropped to the lowest level in decades, with the unemployment rate rising to 4.4%, an increase of 0.4 percentage points from the previous year [1] - The tightening job market prior to 2025 was exacerbated by extensive and frequently adjusted tariff policies, contributing to employment market weakness [1] Group 2 - Companies are adopting a cautious approach to hiring due to the uncertain business environment influenced by tariff policies, with some even initiating layoffs [2] - Economic experts indicate that the unclear policy outlook diminishes companies' motivation to expand their workforce, leading to a more cautious stance on hiring and investment decisions [2] - Tariff policies have altered how companies assess profitability, resulting in increased costs and squeezed profit margins, making previously viable investment projects unprofitable [2] Group 3 - Consumer spending decisions are also being affected by tariff policies, with manufacturers reporting a decrease in new orders due to uncertain tariff prospects [3] - The repeated adjustments in trade policies have left many companies in a state of paralysis, absorbing the increased costs without passing them on to consumers, although the sustainability of this situation remains uncertain [3] - The slowdown in job growth and rising prices, while appearing different, are closely linked to the uncertainty surrounding U.S. policies [3]

Labor Market Overview - The US labor market showed unexpected growth in November, adding 64,000 jobs after a loss of 105,000 jobs in October, surpassing the consensus forecast of 40,000 jobs added [1] - The unemployment rate rose to 4.6%, marking a four-year high, amidst concerns regarding the strength of the US economy [2] Job Data Accuracy and Delays - The release of full October jobs data was canceled, and November's data was delayed due to a 43-day federal government shutdown, raising questions about the accuracy of the reported figures [3] - Federal government jobs decreased by 162,000 in October and by 6,000 in November [2] Federal Reserve Insights - Federal Reserve Chair Jerome Powell advised treating the Bureau of Labor Statistics (BLS) data with skepticism due to the impact of the government shutdown on data collection [4][7] - Powell indicated that the job market may be weaker than reported, suggesting an overcount in payroll job numbers, estimating a potential correction of about 60,000 jobs per month [7] Political Context and BLS Challenges - The BLS has faced scrutiny from the Trump administration, including the firing of its commissioner shortly after a jobs report was published, with claims of the report being "rigged" [8] - The agency's staffing has decreased by 20% under the Trump administration, with a total of 2,058 employees proposed for fiscal year 2024 compared to 1,851 for fiscal year 2026 [10]

Group 1 - The U.S. government shutdown previously caused a lack of key economic data, leading to a month-long information vacuum in the market, but recent employment and inflation reports are expected to validate market expectations [1] - Core inflation in the U.S. remains stubbornly above the Federal Reserve's 2% target, with futures markets pricing in two 25 basis point rate cuts next year, which is double the Fed's own projections [3] - Weak signals in the labor market are emerging, and if further data confirms a cooling labor market, the Fed may have to sacrifice some inflation targets to avoid a recession, potentially leading to a new rally in U.S. Treasuries [3] Group 2 - Following the Fed's decision to lower the federal funds rate by 25 basis points to a range of 3.5%-3.75%, Chairman Powell expressed concerns about slowing hiring activities, which contributed to a nearly 15 basis point drop in Treasury yields from recent highs [3] - To mitigate uncertainty, traders are adjusting their portfolio durations, with a 30% increase in trading volume for short-term Treasuries [4] - The options market shows a surge in trading volume for put options linked to short-term Treasuries, with some institutions constructing bullish strategies betting on rate cuts in Q1 of next year, potentially leading to significant returns if employment data falls short of expectations [4]

Core Viewpoint - The article highlights a significant decline in private sector employment in the U.S. for November, marking the largest drop in nearly two and a half years, primarily driven by job losses in small businesses. This trend indicates a slowdown in hiring activity, which could lead to rising unemployment rates and negatively impact the economy, influencing the Federal Reserve's upcoming interest rate decisions [3][5][10]. Employment Market Cooling - The ADP report indicates a reduction of 32,000 jobs in November, the largest decline since March 2023, with small businesses losing 120,000 jobs. This downturn is attributed to increased costs from import tariffs [5][8]. - The manufacturing sector continues to show weakness, with the ISM manufacturing employment index contracting for ten consecutive months, reflecting ongoing challenges in the job market [8][9]. - Despite a slight increase in employment in medium and large enterprises, the overall hiring freeze persists as employers navigate consumer caution and economic uncertainty [7][9]. Federal Reserve Policy Outlook - The Federal Reserve is expected to announce its final interest rate decision of the year, with labor market weakness being a primary concern. Current data suggests that while the labor market is softening, it has not deteriorated to the extent indicated by the ADP report [10][11]. - Market expectations for a rate cut by the Federal Reserve have risen significantly, with probabilities nearing 90% following the ADP report. Some officials express concerns about inflation, advocating for maintaining current rates, but this view is in the minority [11][13]. - The article notes that inflation remains a critical topic for future policy discussions, with import tariffs potentially continuing to exert upward pressure on prices, complicating the Fed's decision-making process [13].

Group 1 - The latest ADP report indicates a surprising decline in private sector employment by 32,000 jobs in November, contrasting with market expectations of an increase of 10,000 jobs and a previous increase of 47,000 jobs in October [1][3] - Employment growth is projected to stagnate in the second half of 2025, with a downward trend in wage growth. The manufacturing, professional/business services, information, and construction sectors are particularly weak in hiring [3] - The goods-producing sector saw a total reduction of 19,000 jobs, with construction losing 9,000 jobs and manufacturing losing 18,000 jobs, while only natural resources and mining added 8,000 jobs [3] Group 2 - In the services sector, trade/transportation/utilities added 1,000 jobs, education and health services added 33,000 jobs, and leisure and hospitality added 13,000 jobs. However, the information sector lost 20,000 jobs, financial services lost 9,000 jobs, and professional/business services lost 26,000 jobs [3] - Employment changes by company size show that small businesses (1-49 employees) lost 120,000 jobs, while medium-sized businesses (50-499 employees) gained 51,000 jobs, and large businesses (500 or more employees) gained 39,000 jobs [3] - ADP's Chief Economist Nela Richardson noted that the job market remains volatile due to cautious consumer spending and an uncertain macroeconomic environment, with the contraction in hiring primarily driven by small business shrinkage [3] Group 3 - The ADP report serves as the last employment data before the Federal Reserve's meeting on December 9-10, with market expectations indicating a nearly 90% probability of a 25 basis point rate cut [4] - There is a divergence in views among Federal Reserve officials, with some believing that rate cuts are necessary to prevent further deterioration in the labor market, while others are concerned that additional cuts may exacerbate inflation [4]

Core Viewpoint - The Federal Reserve's internal divisions regarding inflation and unemployment pose significant uncertainty for the December interest rate decision, as highlighted in the minutes from the October FOMC meeting [1][3]. Group 1: Internal Divisions - There is a notable split among Federal Reserve officials on the assessment of inflation threats, with some believing current inflation is near policy targets, while others emphasize persistent inflation above the 2% target [1][3]. - The October meeting saw a rare occurrence of dual dissent, with one member advocating for a 50 basis point cut and another insisting on maintaining current rates, marking the first such division since 2019 [1][3]. Group 2: Economic Indicators and Data Gaps - The government shutdown has resulted in significant data gaps, complicating the Fed's decision-making process for the December meeting, as key employment reports are delayed [5]. - The Labor Department announced that the October employment report would not be released, leading traders to abandon expectations for a December rate cut [5]. Group 3: Market Impact and Future Outlook - The widening divisions within the Fed have led to a sharp decline in market expectations for a December rate cut, with investors now leaning towards rates remaining unchanged [6]. - This situation could hinder consumer spending during the holiday season and limit businesses' access to lower borrowing costs for new investments [6]. - President Trump has expressed dissatisfaction with the Fed's direction, indicating potential political tensions regarding the Fed's independence [6].

Group 1 - The USD/CAD exchange rate remains volatile around 1.4008, influenced by weak U.S. private sector job growth and expectations of a potential Fed rate cut in December [1] - The U.S. ADP employment report indicates a significant decline in private sector jobs, with an average weekly decrease of 11,250 jobs, down from 14,250, reflecting a cooling labor market [1] - The Bank of Canada (BoC) has signaled a pause in further rate cuts after reducing the policy rate to 2.25% in October, with expectations that rates will remain stable until mid-2027 [1] Group 2 - The technical analysis of USD/CAD shows a narrow trading range between 1.3980 and 1.4040, with no clear directional signal, and a potential breakout above 1.4050 could lead to resistance at 1.4100 [2] - The RSI indicator is around 50, indicating a neutral market phase, and the focus remains on the impact of the BoC meeting minutes on market expectations [2]

Core Viewpoint - The Federal Reserve is expected to lower interest rates for the second consecutive time to support a weak job market, but there are concerns among some officials about the potential overreach of rate cuts [1][2] Group 1: Interest Rate Decisions - The futures market has fully priced in a 25 basis point rate cut next week, with expectations for further cuts in December and March of next year [2] - Following a 25 basis point cut in September, the Fed is anticipated to lower rates two more times by the end of the year [1][2] - Some Federal Reserve officials express concerns about the aggressive market pricing of future rate cuts, indicating a potential divergence from market expectations [2][6] Group 2: Inflation Concerns - Recent consumer price index data shows that core inflation in the U.S. has dropped to its lowest level in three months, but overall inflation remains stagnant, complicating the case for multiple future rate cuts [1][2] - Officials acknowledge a slowdown in hiring activity and express worries about inflation pressures stemming from non-tariff factors, including a significant drop in immigration affecting labor supply [3][4] - Inflation rates have exceeded the Fed's 2% target for over four years, with expectations that it may not return to target until 2028, raising concerns about long-term inflation expectations [5][6] Group 3: Economic Outlook and Credibility - The current government shutdown has disrupted the release of official economic data, making it challenging for Fed officials to assess the economic landscape [6] - There is a notable divide among Fed officials regarding the economic outlook, with some calling for caution in rate cuts due to conflicting signals between strong economic growth and a weak job market [6]