What’s going on here?

The upcoming US jobs report has stock markets on edge, as investors want to see if 2025 will keep supporting last year’s impressive growth.

What does this mean?

After a striking 23% jump in the S&P 500 in 2024 – the biggest two-year surge since the late 90s – everyone’s glued to the US job scene. Investors hope for signs of steady growth to keep the momentum rolling. Plus, with the Federal Reserve adjusting its rate cut plans for 2025, solid labor data could sway its strategy. The job market’s been shaky, given issues like aerospace strikes and hurricanes, yet economists predict 150,000 new jobs in the December report due January 10. A solid job market might stir inflation fears, an ongoing concern flagged by a senior strategist at Edward Jones.

Why should I care?

For markets: Jobs report set to break mold.

After a bumpy December that saw the S&P 500 dip 2.5%, all eyes are on employment data for clarity. With disruptions like aerospace strikes, strong job figures might counteract recent market softness, particularly as post-holiday trading picks up. Investors are eager to read these numbers as indicators of market trends moving deeper into 2025.

The bigger picture: Employment keeps the economy moving.

A Natixis survey highlights that 73% of institutional investors think the US will dodge a recession this year. But consistent job growth is vital, as any sudden downturns could shake this confidence and drive market swings. The jobs report will help frame expectations for economic steadiness, guiding policymakers, including the Fed, as they balance growth with potential inflation threats.