The non-farm data in December was unexpectedly poor. Data from the U.S. Bureau of Labor Statistics showed that the U.S. non-farm employment increased by 199,000 in December, far below the market expectations of 400,000, and the smallest increase since January 2021.

2 December non-farm data was unexpectedly poor. U.S. Bureau of Labor Statistics data (enterprise survey) showed that the U.S. non-farm employment increased by 199,000 in December, far below the market expectations of 400,000, and set the smallest increase since January 2021. After the data of

was released, the S&P Nasdaq fell four consecutive times, and the S&P hit a new low for two weeks, falling 1.9% for the whole week, and the Nasdaq hit a new low in the past three months, falling more than 4% this week to the largest weekly decline in ten months.

European and American bond yields continued to rise, with the benchmark 10-year US bond yield jumping intraday, breaking through 1.8% at one point, reaching a high since January 2020. German bond yields hit new highs since May 2019, rising by more than 20 and 10 basis points respectively throughout the week.

Gold has temporarily left the trough for more than two weeks, but it still hit the largest weekly decline in the six weeks of Thanksgiving, ending the four-week continuous rise.

New employment is far inferior to expectations. Why can't the market rate hike expectation cool down?

employment data is not as bad as it looks

Although the corporate survey data is not as expected, the household survey shows that the U.S. employment market is still growing steadily: the overall employment number increased by 651,000 to 155,97 million in December.

data shows that the unemployment rate in in December was 3.9%, which continued to hit a new low since February 2020, better than the market expectations of 4.1%. salary continues to rise, with the average hourly salary in December increasing by 4.7% year-on-year and 0.6% month-on-month. In addition, the proportion of the population who are employed or are looking for a job has improved slightly.

The British Financial Times quoted Brian Rose, a senior economist at UBS (UBS), saying: "Federal decided to focus more on the unemployment rate rather than the number of jobs." " unemployment rate has dropped to 3.9%, which is really crucial to the Fed."

The media said that US President Biden believes that the decline in unemployment rate and wage growth can prove that its policies (including trillions of dollars in stimulus plans and infrastructure spending) are successful, rather than the employment speed.

"The job market is hot," said Rick Rieder, chief investment officer of the global fixed income division of BlackRock, the largest listed investment management group in the United States. "This can be said to be the hottest year ever."

In addition, economists believe that 's preliminary estimates of overall employment growth in future reports may be significantly revised because it is difficult to economically measure employment during the epidemic.

2 salary data will be updated in February and March, and this number is likely to be underestimated; upward corrections have added more than 1 million jobs throughout the process in 2021, setting a single-year high.

Federal Chairman Powell recently said the Fed is paying close attention to wage growth, looking for further evidence that inflation may evolve into a more lasting problem.

In recent months, the existing labor shortage problem has become even worse as the number of Americans resigned has hit a new high.

Data released by the U.S. Bureau of Labor Statistics showed that more than 4.5 million workers resigned in November, breaking the record of 4.4 million set in September, far higher than the 4.2 million in October. The number of vacancies is close to an all-time high, with 10.6 million vacancies at the end of November, just slightly lower than the 11.1 million reported a month ago.

According to an article in the Financial Times, economists call this trend a "big resignation" as workers are actively looking for new jobs, forcing employers to raise their wages to attract talent. Worries about the pandemic and child care issues have also hindered workers from returning to the labor market faster, resulting in a mild rebound in the proportion of the population who are employed or are looking for jobs.

Employers have raised wages dramatically to attract workers, and economists and the Fed say it is closely watching the economic recovery and looking for any signs of continued inflation rising. In its latest survey of CEOs of big companies, the Business Roundtable found that rising wage costs due to labor shortages have risen to CEOs’ top concerns, far exceeding issues such as supply chain disruptions or rising material costs.

North America's largest commodity supplier Connolly said this week:

"The labor market is tight, and we need great creativity and effort to do our best to attract and retain employees." "This is a torture every day."

unemployment rate has declined, 3html May rate hike has gradually become a consensus

Currently, the U.S. inflation rate hoveres at the highest level in about 40 years, and the Federal Reserve faces huge pressure to reduce inflation. Coupled with the decline in unemployment rate and the emergence of the Federal Reserve's release of minutes of a "hawkish" meeting, expectations for interest rate hikes in March have risen sharply.

Barclays turned to believe that the Fed may raise interest rates in March as early as the November employment report was released. Goldman Sachs said in a research report released after the FOMC meeting in December that it had advanced its rate hike forecast, that is, the Federal Reserve will raise interest rates three times next year, in March, June and September respectively. After the unemployment rate data was released, Wall Street bigwigs including JPMorgan Chase , Deutsche Bank , Citi , etc. also joined the team of expected interest rate hikes in March.

data shows that the market predicts the possibility of interest rate hikes in March this year soaring to nearly 90%.

In addition, Fed governor Waller and St. Louis Federal Reserve President Brad and others also supported the rate hike in March and believed that further rate hikes will be raised later this year.

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