3. Wall Street expects another booming jobs report
Economists predict the U.S. added around 160,000 jobs last month but many on Wall Street are expecting another blowout number, following the 266,000 jobs added in November.
Why it matters: The pace of job growth in 2019 slowed from the prior year, but a winter pickup could signal that the labor market gained momentum going into 2020.
- It would be a strong sign that the negative impact from the trade war has subsided and the U.S. economy is on even stronger footing.
What happened: The ADP private payrolls report showed a better-than-expected 202,000 jobs added for December after a weak November report, and the number of Americans filing for unemployment benefits fell unexpectedly last week to 214,000 — well below the historical average.
What they're saying: "The downward trend in unemployment likely will continue; 60-year lows coming soon," Pantheon Macroeconomics chief economist Ian Shepherdson said in a note to clients. "Low unemployment is finally emboldening employees to push for bigger wage increases."
- Goldman Sachs analysts called for "a rebound in retail job growth related to the late Thanksgiving, and a weather-related rebound in the Midwest after winter storms during the November survey period."
- In a note, Goldman added that "December job growth tends to remain strong in tight labor markets, as labor supply constraints may incentivize firms to reduce end-of-year layoffs."
Yes, but: The six-month average for payrolls prior to November's big jump was 162,000, DRW Trading rates strategist Lou Brien says in a note, and December is no longer the primary month for holiday retail hiring — it's moved to October and November.
- Retail hiring in December of 2018 and 2017 averaged just 19,000, "the lowest totals for any months in the history of the survey, dating back to 1939."