Next week, the non-farm payroll release will return to normal timing, with unemployment rate fluctuations becoming the market focus

U.S. Non-Farm Payrolls Data to Resume Regular Release Next Thursday (January 9), First Since September Last Year. The December employment data delayed due to the government shutdown is about to be released, and there are significant differences among institutions’ expectations for the unemployment rate trend, which will directly impact market judgments on the Federal Reserve’s rate cut prospects.

Background of Non-Farm Data Resuming Normal Schedule

Next week’s non-farm payrolls release marks the return to the regular rhythm of U.S. economic data publication. Since September last year, this is the first time the non-farm employment report is published according to the standard schedule. The reason behind this is that the U.S. government shutdown at the end of 2025 caused delays in several key economic data releases, leading to a dense “data week” in early to mid-January.

According to relevant information, besides non-farm employment data, January will also see the release of several important economic indicators such as the December Consumer Price Index (CPI). The concentrated release of these data will provide the market with a more complete picture of the U.S. economic fundamentals.

Diverging Expectations Among Institutions, Unemployment Rate Becomes Focus

There are clear differences among institutions regarding the trend of the December unemployment rate.

Citigroup’s forecast is more pessimistic. They expect only a 75,000 increase in non-farm payrolls in December, with the unemployment rate rising from the current 4.6% to 4.7%. Citigroup notes that although layoffs remain low, a rebound in labor force participation could push the unemployment rate higher.

In contrast, KKR Macro holds a relatively optimistic view, expecting the unemployment rate to slightly decline to 4.5%.

This divergence in expectations reflects differing judgments about the health of the U.S. labor market. Initial jobless claims data show that weekly unemployment benefit claims during the Christmas week fell from 215,000 to 199,000, but Citigroup points out that this may be affected by seasonal adjustments, and the true signal requires further observation.

Impact on Federal Reserve Policy Expectations

The release of non-farm data will directly influence market expectations regarding the Federal Reserve’s rate cut prospects. According to relevant information, market expectations for rate cuts in 2026 have already adjusted significantly. The probability of a rate cut in January has fallen to 15%, and the March rate cut probability has also dropped below 50%. This contrasts sharply with the optimistic “big easing” expectations prevalent at the end of last year.

Key Points

• If the unemployment rate rises to 4.7%, it may strengthen market concerns about economic slowdown, favoring a rebound in rate cut expectations
• If the unemployment rate remains at 4.6% or falls to 4.5%, it will support the Fed’s stance to maintain high interest rates
• The number of non-farm jobs added will also be an important reference for assessing labor market strength

Market Liquidity Expected to Improve

Danske Bank’s FX and Rates Strategist noted that global market liquidity is expected to remain subdued this week but may rebound next week. With more economic data being released, market liquidity should improve. This is a positive signal for risk assets such as cryptocurrencies, as improved liquidity generally boosts trading activity.

Potential Impact on Cryptocurrency Market

Short-term Focus

Before and after the non-farm data release, the cryptocurrency market may experience volatility. If data shows a strong employment market, the Fed maintaining high interest rates could pressure risk assets. Conversely, if employment appears weak, with rate cut expectations rising, it could support risk assets like Bitcoin.

Medium-term Outlook

The clarity of the Fed’s policy path has a significant impact on the crypto market. If January’s non-farm and CPI data confirm a soft landing for the economy, the Fed may start rate cuts in the first half of the year, which would be conducive to liquidity and support risk assets. However, if data shows persistent inflation and robust employment, high interest rates may continue, putting pressure on the crypto market.

Summary

Next week’s release of the normal schedule for non-farm payrolls is a key moment to gauge the true state of the U.S. economy. Diverging expectations among institutions, and whether the unemployment rate rises or falls, will directly influence Fed policy expectations. Improved market liquidity expectations also support risk assets. Investors should closely monitor the data itself and observe market reactions. This report not only relates to the Fed’s policy direction but will also influence short-term movements in global financial markets.