Employment Data - In February, the U.S. non-farm employment decreased by 92,000, marking the second-largest decline since 2021, with the previous value revised to an increase of 126,000[7] - The average employment growth over the past three months is only 6,000, indicating a significant slowdown in the labor market[7] - Key sectors such as healthcare, leisure and hospitality, information, and transportation and warehousing experienced notable job losses, with healthcare and social assistance jobs declining by 19,000[7] Unemployment Rate - The unemployment rate rose to 4.4% in February, up from 4.3% in January, reflecting an increase of 0.1 percentage points[8] - The number of unemployed individuals increased by 209,000, primarily due to a rise in temporary layoffs and individuals re-entering the labor market[8] - The labor force participation rate decreased to 62.0%, down 0.1 percentage points from the previous month[8] Federal Reserve Outlook - FedWatch indicates that the market is pricing in 1.5 rate cuts (38.0 basis points) by the Federal Reserve in 2026, amid rising geopolitical tensions affecting inflation risks[12] - The nomination of Kevin Warsh as the new Fed Chair may influence future monetary policy, particularly regarding interest rate cuts[12] - The Fed is likely to remain cautious in its approach to rate cuts, with the potential for a gradual increase in easing measures depending on Warsh's agenda control[12]

Core Viewpoint - The U.S. labor market shows signs of weakness with a significant decline in non-farm employment and rising unemployment rates, leading to increased expectations for interest rate cuts by the Federal Reserve [2][6][17]. Employment Data - In February, non-farm employment decreased by 92,000, significantly below the expected increase of 55,000, marking the largest drop since November 2025 [2]. - The private sector also experienced a downturn, with January's employment figures revised down to -86,000, and the three-month average falling to 41,000, well below the previous average of 94,000 [2]. - The education and healthcare sector saw a notable decline, losing 34,000 jobs due to a strike affecting over 30,000 employees [5]. Unemployment and Labor Participation - The unemployment rate increased by 0.1 percentage points to 4.4%, surpassing both previous values and expectations [6]. - The labor force participation rate dropped to 62%, the lowest since 2022, contributing to a decrease in the employment rate to 59.3% [6]. - The number of job vacancies fell to 6.542 million, the lowest since the COVID-19 pandemic, with the vacancy rate dropping below 4% for the first time since the pandemic [7]. Wage Growth - Average hourly earnings remained stable at a month-on-month increase of 0.4%, with a year-on-year growth rate of 3.8%, slightly above expectations [9]. - The retail and financial sectors reported the highest year-on-year wage growth at 4.5% and 4.3%, respectively, while the education and healthcare sectors had the lowest growth rates at 2.9% [13]. Market Reactions - Following the release of the employment data, market expectations for a rate cut by the Federal Reserve increased from 33.3% to 50.4% [17]. - U.S. stock indices experienced significant declines, and the dollar index initially fell before rebounding, while the 10-year Treasury yield dropped to 4.11% before recovering to 4.18% [17].

Report's Investment Rating - The rating for the US dollar is "oscillating" [2] Core Viewpoints of the Report - The US January non-farm payrolls far exceeded expectations, and short-term expectations for interest rate cuts cooled. The necessity for short-term interest rate cuts significantly decreased, with the expectation of rate cuts postponed. It is likely that rate cuts will continue to be paused in January, with 1 - 2 rate cuts expected in 2025, and the first rate cut is expected to be postponed to June - July [3][4][36] - Although the January non-farm data alleviated concerns about the deterioration of the employment market, the significant downward revision of the total number of new jobs in 2025 and the possible adjustment of the unemployment rate in February make it difficult to judge that the employment market has reversed its downward trend [4][36] - Future policy implementation faces multiple constraints, geopolitical risks remain unresolved, and market volatility is difficult to reduce. The precious metals and non-ferrous sectors are oscillating after a sharp decline, the US dollar index has risen and then fallen, the yield curve of US Treasury bonds has become steeper, and the US stock market continues to oscillate at a high level [5][40] Summary by Relevant Catalogs 1. US January Non-farm Payrolls Exceed Expectations, Short-term Interest Rate Cut Expectations Cool - **Overall Data**: The newly added non-farm employment in January was 130,000, far exceeding the market expectation of 70,000. After revision, the average monthly new employment in 2025 was 15,000, and the new employment center further declined. The unemployment rate fell to 4.3%, the labor participation rate rose to 62.5%, the month-on-month growth rate of hourly wages was 0.4%, and the year-on-year growth rate was 3.7% [3][9] - **Industry Details**: New employment mainly came from education and healthcare (137,000), professional and business services (34,000), and construction (33,000). Private service employment increased by 136,000, while the government sector's employment decreased by 42,000. The production sector's employment increased by 36,000, with construction adding 33,000 and manufacturing production adding 5,000 [3][18][25] - **PMI and Job Vacancies**: In January, the ISM PMI rebounded significantly. The service PMI was 53.8, and the employment sub - item was 50.3. In December, the number of job vacancies dropped to 6.54 million, with a significant decline in the service sector and a slight increase in the production sector [22][25][28] - **Wages and Working Hours**: In January, the year-on-year growth rate of wages was flat, and the month-on-month growth rate rebounded to 0.4%, still supporting core inflation and household consumption. The average weekly working hours were 34.3 hours, higher than expected and the previous value [33][35] 2. Investment Recommendations - The market is still digesting the impact of Wash's election as the new Fed Chairman. The policy proposal of rate cuts and balance sheet reduction has triggered concerns about future liquidity tightening. However, short - term economic resilience, inflation stickiness, and long - term US Treasury supply limit the space for policy implementation [5][40] - Geopolitical risks remain, and market volatility is difficult to reduce. The precious metals and non - ferrous sectors are oscillating after a sharp decline, the US dollar index has risen and then fallen, the yield curve of US Treasury bonds has become steeper, and the US stock market continues to oscillate at a high level [5][40]

Employment Data - In January, non-farm employment increased significantly by 130,000, surpassing the expected 65,000, marking the largest increase since January 2025[7] - Private sector employment added 172,000 jobs in January, with a three-month average of 103,000 and a fourth-quarter average of 50,000[7] - The education and healthcare sectors contributed the majority of the employment increase, adding 137,000 jobs[8] Unemployment and Labor Participation - The unemployment rate fell by 0.1 percentage points to 4.3%, driven by improved job demand[9] - The labor participation rate rebounded by 0.1 percentage points to 62.5%, primarily due to increases in the 20-54 age group[13] Wage Growth - Average hourly earnings increased by 0.4% month-on-month, exceeding the expected 0.3%[19] - Year-on-year wage growth decreased slightly to 3.7%, remaining stable within the 3.7%-3.9% range since the second half of 2025[19] Market Expectations - Following the strong employment data, the probability of a Federal Reserve rate cut in March dropped from 21.7% to 7.9%, and the probability of a cut before June decreased from 75% to 59.8%[2] - U.S. stock indices rose, the dollar strengthened, and U.S. Treasury yields increased, with the 10-year yield reaching a high of 4.2% before retreating[2]

Group 1 - The core point of the article highlights a notable divergence in the U.S. labor market, with a slowdown in job growth but resilient wage increases, indicating structural differences across industries, regions, and company sizes [1][2][3] Group 2 - In January, the U.S. private sector added only 22,000 jobs, a significant slowdown from the revised previous value of 37,000 [2] - The education and health services sector saw a notable increase of 74,000 jobs, while professional and business services, manufacturing, and information sectors experienced declines of 57,000, 8,000, and 5,000 jobs respectively [2] - The Midwest region showed the strongest growth with an increase of 25,000 jobs, while the South and West regions combined saw a decrease of 21,000 jobs [2] - Medium-sized enterprises (50-499 employees) were the only contributors to job growth, adding 41,000 jobs, while large enterprises (500+ employees) cut 18,000 jobs, and small enterprises saw no net growth [2] Group 3 - Wage resilience is evident, with the median annual salary for job stayers increasing by 4.5% year-on-year, maintaining the same growth rate as the previous month [2] - Salary growth for job switchers slightly slowed to 6.4%, but remains significantly higher than for job stayers, indicating ongoing opportunities for wage increases through job changes [2] - Salary growth is relatively balanced across industries, with financial activities and manufacturing leading with increases over 5%, while information sector growth remains above 4% [2] - Company size is a key factor in salary growth, with large enterprises seeing a 5.0% increase for job stayers, medium enterprises at 4.7%-4.8%, and the smallest enterprises (1-19 employees) at only 2.5% [2] Group 4 - Market analysis indicates a shift in the U.S. labor market from a "quantity shortage" to "cost pressure," with persistent wage pressures despite the slowdown in job growth [3] - The rigidity of wages in large enterprises may support core service inflation, leading to mixed market expectations regarding the Federal Reserve's policy direction [3] - Stable wage growth could delay interest rate cuts, while weak job growth raises concerns about economic slowdown [3]

Economic Structure Insights - The "golden crossover" of new and old economies indicates that by 2025, the new economy's GDP share will rise to 20%, surpassing the old economy's 19.7%[11] - By 2026, residents' financial assets are expected to exceed the total value of urban residential properties for the first time, indicating a shift in wealth structure[12] Spending Intentions - Combined spending intentions of residents, government, and overseas sectors are projected to stabilize in 2024 and show a first increase in 2025, driven by strong export performance and increased fiscal counter-cyclical adjustments[13] Market Dynamics - Recent market volatility is attributed to sharp fluctuations in gold and silver prices, with A-share indices experiencing a significant drop of 0.96% on January 30, 2026, primarily due to external factors[15] - The probability of a significant market pullback post-volatility is considered low, as domestic economic recovery is ongoing and supportive policies remain in place[16] Debt Market Outlook - The bond market is experiencing a correction of pessimistic expectations, with a notable recovery in the long-end segment, driven by improved risk appetite and stable funding conditions[20] - The issuance pace of local government bonds is slower than expected, alleviating supply pressure in the bond market[21] Federal Reserve Policy - The Federal Reserve maintained the federal funds rate at 3.5%-3.75% in January 2026, signaling a shift to a "wait-and-see" approach regarding future rate cuts[25] - The Fed's recent statements reflect a more positive outlook on economic growth, with a focus on normalizing monetary policy rather than further rate cuts in the near term[26]

Core Viewpoint - The article focuses on "Four Golden Crosses and Their Implications for Investment," highlighting significant economic signals that indicate potential shifts in the economic landscape [2]. Group 1: Golden Cross of New and Old Economy GDP Proportions - A model categorizes the economy into new (equipment manufacturing, information, leasing, and business services) and old (real estate, construction, and building materials) sectors. In 2015, the new economy accounted for 14.5% of GDP, while the old economy was at 24.2%, a 10 percentage point difference. By 2025, the new economy is projected to rise to 20%, surpassing the old economy at 19.7%, marking a significant shift in economic structure [3]. - This change suggests that even if the old economy does not stabilize, the overall economy may still recover due to the growth and increased size of the new economy, aligning with expectations of nominal GDP bottoming out and rebounding by 2026 [3]. Group 2: Golden Cross of Household Wealth Structure - A simplified model of household wealth focuses on urban housing and financial assets. By 2026, financial assets (deposits and non-deposit financial assets) are expected to exceed the total market value of urban residential properties for the first time. Since 2022, the total market value of urban housing has been declining, while financial assets have been growing, indicating a potential shift in household wealth dynamics [6]. - If this golden cross occurs, it could lead to a new phase in household wealth, positively impacting social risk appetite and consumer spending tendencies [6]. Group 3: Recovery of Spending Willingness Across Three Sectors - The article examines the spending willingness of residents, government, and overseas sectors. The combined spending willingness of these three sectors has been declining since 2021. However, a turning point is anticipated in 2024-2025, with a stabilization in 2024 and a potential recovery in 2025, driven by better-than-expected exports and increased fiscal counter-cyclical measures [7]. - If this positive trend continues into 2026, it is expected to gradually reflect in economic data [7]. Group 4: Optimal Midstream Economic Conditions - An analysis of supply-demand structures in the manufacturing sector reveals that the midstream segment currently exhibits the best balance, surpassing the high point of 2021. The downstream sector has just turned positive in terms of supply-demand growth differentials, while upstream conditions may lag behind due to their strong ties to the old economy [10]. - The midstream sector's favorable conditions are clear and independent, suggesting a potential improvement in upstream supply-demand dynamics in the future [10].

Core Insights - The article discusses the economic structure and industrial layout of New York City, highlighting the distribution of major industry sectors and their impact on the regional economy [2][7]. - It emphasizes the concentration of economic activity in a few key sectors while many others contribute relatively less, illustrating a dual characteristic of concentration and dispersion in New York's economy [7][8]. Economic Structure - In 2023, New York City's total economic output was $1,285.74 billion, with a clear distinction between "core pillar industries" (over 10% contribution), "mid-tier supporting industries" (3%-10%), and "specialty supplementary industries" (below 3%) [7][8]. - The "core pillar industries" include finance and insurance, real estate, information, and professional and technical services, collectively contributing $785.84 billion, or 61.1% of the city's GDP [8]. Key Industries - The finance and insurance sector alone accounts for approximately 25% of New York City's GDP, underscoring its status as a global financial center [8]. - Real estate and rental services are significant contributors, primarily driven by transactions, property management, and related services concentrated in Manhattan [8]. - The information sector has seen rapid growth, increasing from 10% to 12.4% of GDP over the past 20 years, while professional and technical services contribute around 10% [8]. Supporting Industries - "Mid-tier supporting industries" encompass public administration, wholesale and retail trade, healthcare, and accommodation and food services, collectively making up 23.3% of the economy [9][10]. - These industries are essential for maintaining the city's operational stability and resilience against economic fluctuations, as they are less affected by short-term economic changes [10]. Specialty Industries - "Specialty supplementary industries" include agriculture, mining, utilities, construction, manufacturing, transportation, management services, education, and arts and entertainment [11]. - Although these industries have a lower economic contribution, they play a vital role in supporting core industries and enhancing the city's cultural vibrancy [11]. Manufacturing Sector - Manufacturing's share of New York City's GDP has drastically declined to only 0.8% in 2023, reflecting a broader trend of urban centers moving away from manufacturing towards service-oriented economies [14][19]. - The historical context shows that manufacturing was once a significant part of New York's economy, particularly post-World War II, but has since diminished due to the rise of the service sector [15][18]. Current Manufacturing Landscape - The remaining manufacturing in New York is characterized by "urban service-oriented manufacturing," focusing on light industries such as food and apparel, which cater directly to local consumer needs [22][23]. - The manufacturing sector is primarily composed of food manufacturing (26.9%), apparel manufacturing (15.0%), and printing (13.4%), indicating a strong alignment with urban consumption patterns [25][22].

Group 1: Economic Structure and Wealth - By 2025, the new economy is expected to account for 20.1% of the total economy, surpassing the old economy at 19.7% for the first time[2][11] - Financial assets held by residents are projected to exceed residential assets by 2026, driven by increases in deposits, non-deposit financial investments, and stock market valuations[3][13] Group 2: Spending Willingness and Supply-Demand Dynamics - Resident spending willingness has declined from 101.4% in 2021 to 80% in 2025, but is expected to rebound to 107.6% by 2025 due to fiscal and external demand support[4][18] - In December 2025, the midstream manufacturing sector is expected to see a demand growth rate of 8.4%, contrasting with upstream at -6.8% and downstream at 3.2%[5][21] Group 3: Quarterly Economic Data Insights - In Q4 2025, GDP growth was recorded at 4.5%, with a nominal GDP growth of 3.8% and a cumulative annual growth of 5.0%[6][25] - The contribution rates to economic growth in Q4 were 52.9% from final consumption, 16.0% from capital formation, and 31.1% from net exports[29] Group 4: Employment and Consumer Behavior - The urban unemployment rate remained stable at 5.1% in December 2025, with a total of 18.006 million migrant workers, reflecting a year-on-year growth of 0.8%[46][39] - Consumer spending growth in December was 0.9%, down from 1.3% in the previous month, indicating a slowdown in consumer demand[51][43]

Core Viewpoint - The report discusses four macroeconomic counterforces that are expected to strengthen by 2025, potentially leading to a healthier economic environment in 2026, characterized by rising prices, improved corporate profits, and stable employment and consumption [2][4]. Group 1: Four Strengthening Counterforces - **Economic Structure**: By 2025, the new economy is projected to account for 20.1% of the economy, surpassing the old economy at 19.7%, marking the first time this has occurred [4][13]. - **Household Wealth**: Financial assets are expected to exceed residential assets by 2026, driven by growth in deposits, non-deposit financial investments, and stock market valuations [5][15]. - **Spending Willingness**: Despite a decline in household spending inclination, the combined spending willingness of three sectors is anticipated to rise from 107.2% in 2023 to 107.6% in 2025 [7][16]. - **Supply-Demand Imbalance**: The supply-demand contradiction in the midstream manufacturing sector is rapidly easing, with midstream demand growth projected at 8.4% for 2025, outperforming upstream and downstream sectors [8][20]. Group 2: Economic Data Analysis for Q4 - **GDP Growth**: In Q4, GDP growth was 4.5%, down from 4.8%, with a cumulative annual growth rate of 5.0% [10][22]. - **Investment Trends**: Fixed asset investment saw a significant decline of -13.2% in Q4, with real estate sales area decreasing by -17.0% [23][50]. - **Consumer Spending**: Retail sales growth in December was 0.9%, down from 1.3%, indicating a slowdown in consumer spending [31][38]. - **Employment Stability**: The urban unemployment rate remained stable at 5.1% in December, with a total of 30.115 million migrant workers, reflecting a slight increase of 0.5% year-on-year [36][30]. Group 3: December Economic Data Insights - **Production Strength**: December saw industrial output growth of 5.2%, with service sector production index at 5.0% [31][46]. - **Real Estate Market**: The real estate sector experienced a downturn, with a sales area decline of -15.6% in December and a significant investment drop of -35.8% [43][44]. - **Price Trends**: In December, the PPI decreased by -1.9%, while the CPI rose to 0.8%, indicating mixed price pressures in the economy [34][35].