Group 1 - Private sector added 41,000 jobs in December, below economists' estimates of 47,000 jobs [1] - Previous month's payrolls revised to a loss of 29,000 from an initial loss of 32,000 [1] - Small establishments showed positive hiring at year-end, while large employers reduced hiring [1] Group 2 - Education and health services led job creation with 39,000 positions added in December [2] - Leisure and hospitality added 24,000 positions, while trade, transportation, and utilities added 11,000 [2] - Professional and business services lost 29,000 jobs, with information and manufacturing losing 12,000 and 5,000 positions respectively [2] Group 3 - Large businesses (500 or more employees) added 2,000 jobs, while businesses with 50 to 499 employees added 34,000 [3] - Establishments with fewer than 50 employees added 9,000 jobs [3] - Wage growth remained stable, with pay for those staying in their roles increasing by 4.4% year-over-year [3]

Core Insights - Employers are expected to remain cautious about major hiring, leading to limited pay increases in the upcoming year [1][2] Employment Trends - Major forecasts indicate a continuation of recent trends in the job market, with hiring slowing significantly compared to previous years [2] - Employers are hesitant to hire extensively while also avoiding mass layoffs due to economic uncertainty from unpredictable tariff policies [2] Wage Growth - U.S. employers plan to implement average raises of 3.3% in 2026, slightly lower than the previous year [3][9] - Wage growth is anticipated to be moderate, reflecting a cooling labor market, with job openings stabilizing and a slight rise in unemployment [4][9] - Wage growth has decreased over the past year, with a reported increase of 2.5% in September compared to 3.4% in January [5][6] Economic Implications - The job market is expected to remain subdued, with forecasts suggesting that wage increases will not match the significant raises seen in 2022 [4] - Some economists believe that the slowdown in the job market may exert downward pressure on wages, influencing the Federal Reserve's decisions on borrowing costs [6] Sector-Specific Insights - There is potential for wage increases in sectors like construction, which have been impacted by immigration policies, as these areas may experience tighter labor conditions [7][9] - A modest improvement in demand could stabilize and tighten the labor market, particularly in sectors affected by labor supply issues [8]

Britain’s jobs market is pulling in two directions: unemployment is rising, yet wage growth is barely slowing at all https://t.co/2dIx1cb900 ...

The unemployment rate rose more than expected in November and previous jobs figures were revised downward as the first full report after months of a data fog revealed a weakening labor market.Hiring remained steady as US employers added 64,000 jobs in November, above expectations of a 50,000 increase, the Bureau of Labor Statistics said Tuesday.But the unemployment rate jumped to 4.6%, its highest level since September 2021 – up from 4.4% in September, according to government data.US employers added 64,000 ...

The latest UK jobs data reveals a weaker employment market with wage growth gradually cooling, though still higher than expected. It's still not at all clear whether this is just "normalising", or the prelude to larger falls. https://t.co/6QOUc1v4NS ...

All right, let's start off. How much weight is actually on this jobs report when we know there's going to be other key inflation reports coming up later this week. Another jobs report before the Fed meets again and makes this decision.How much weight are you putting on this. >> Yeah, I think it is an important one. Um, but there is going to be some weird dynamics in the data that we're getting this week.We know that maybe errors around this data are a bit bigger than usual just because of delayed collection ...

UK unemployment climbed to its highest level in almost five years and wage growth eased https://t.co/q8ielEK0jA ...

Core Viewpoint - Morgan Stanley suggests that despite some negative economic signals, the economy is in an "early cycle" environment with potential for growth ahead [1][3]. Economic Indicators - ADP private payrolls were negative in November, and layoffs are at the highest levels in two decades, indicating some economic stress [1]. - The unemployment rate is rising, but Morgan Stanley believes the worst is already behind us [1]. Earnings Growth - There has been a significant rebound in earnings revisions, with the S&P 500 earnings revisions breadth improving from negative 25% in April to positive 15% [4]. - This rebound is typically seen in early cycle environments, suggesting improving business confidence [4]. Wage Growth and Profit Margins - Wage growth has slowed to a three-month moving average of 4.1% year-over-year, down from 6.7% in July 2022, providing room for profit margins to expand [4]. - Such a decline in wage growth is often observed during recessionary periods [4]. Consumer Demand - Consumer demand is expected to accelerate, as companies are showing higher pricing power, allowing them to increase prices without significantly impacting demand [5]. Federal Reserve Actions - The Federal Reserve is cutting rates to stimulate economic activity, with expectations of two additional cuts in 2026 [6]. - Moderate weakness in the labor market is anticipated to continue, which will support these rate cuts without leading to a recession [6]. Market Outlook - Morgan Stanley forecasts a 14% rise in the S&P 500 to 7,800 by 2026, indicating a bullish outlook for the stock market [7]. Investment Recommendations - The bank recommends an "overweight" position on consumer discretionary stocks, which are expected to perform well during economic recoveries [8]. - This sector includes companies benefiting from consumer spending on non-essentials, such as apparel and hospitality [8].

Core Viewpoint - Morgan Stanley suggests that despite some negative economic signals, the economy is in an "early cycle" environment, indicating potential for growth ahead [1][2]. Economic Indicators - Earnings revisions for the S&P 500 have rebounded from a low of negative 25% in April to around positive 15%, signaling improved business confidence [2]. - Wage growth has slowed to a three-month moving average of 4.1% year-over-year, down from 6.7% in July 2022, providing room for profit margin expansion [2][3]. - Consumer demand is expected to accelerate as companies gain higher pricing power, allowing them to raise prices without significantly affecting demand [3]. Federal Reserve Actions - The Federal Reserve is expected to cut rates, with two cuts anticipated in 2026, aimed at stimulating economic activity [3]. Market Projections - The S&P 500 is projected to rise by 14% in 2026, reaching 7,800 [4]. Investment Recommendations - Morgan Stanley recommends an "overweight" position on consumer discretionary stocks, which are expected to perform well during economic recoveries [5]. - Small-cap stocks are also expected to do well due to their cyclical nature and sensitivity to falling interest rates, with rising earnings growth noted in the Russell 2000 index [6]. - The financial sector is viewed positively, with expectations of improved loan growth benefiting banks [7]. Investment Vehicles - Investors can gain exposure to recommended sectors through ETFs such as the Vanguard Consumer Discretionary ETF (VCR), iShares Russell 2000 ETF (IWM), and iShares U.S. Financials ETF (IYF) [8].

Consumer Spending Trends - Overall consumer spending is still growing, but the pace has slowed, increasing by 13% year-over-year in November, down from 24% in October [2][3] - Seasonally adjusted month-over-month consumer spending was flat in November, the first time in five months it didn't grow [3] - Higher-income consumer spending grew by 26%, while lower-income consumer spending grew by 06%, indicating a divergence [4] - Middle-income consumer spending experienced a pullback, going from up 17% to up only 14% [5] Wage Growth Disparities - Higher-income wage growth was up 4% in November, the highest level in four years [6] - Lower-income households also saw wage increases, going from 1% to 14%, but the difference remains significant [6] - The labor market for lower-income individuals is stabilizing rather than declining [7] Labor Market Insights - The number of accounts receiving a paycheck increased by 02% in November, indicating the labor market is expanding, though at a slower pace than in previous months [10][11] - The number of new households receiving unemployment benefits remains relatively consistent with previous months [13] - The labor market is described as being in a "higher low fire environment," but still expanding [13] Inflation Analysis - Growth in holiday spending is driven by more transactions, suggesting inflation is not accelerating in that area [15][16]