Tonight at 21:30, the United States will release the December 2025 Non-Farm Payrolls report. How significant is this data for the market? Looking ahead to the start of 2026, this is undoubtedly the most watched economic indicator.

The report will disclose three core data points: changes in non-farm employment, the unemployment rate trend, and wage growth performance. These figures may seem cold, but they directly determine the Federal Reserve's future policy direction and influence investors' judgments on whether the U.S. economy can achieve a soft landing.

Currently, the U.S. labor market has shown clear signs of cooling. Recently released ADP private sector employment data performed poorly, coupled with the latest government sector adjustments, making the overall employment situation less optimistic.

Looking at the performance over the past few months makes this clear. In November, non-farm employment increased by 64,000 jobs, which seems okay, but October saw a sharp decline of 105,000 jobs. The unemployment rate rose from 4.4% in September to 4.6% in November, reaching the highest level since 2021. The decline in employment in October was the most severe since the end of 2020, mainly due to a reduction of 162,000 federal government jobs. As for the October unemployment rate? The U.S. Bureau of Labor Statistics simply did not publish it because data collection was affected.

What is the market currently expecting? The December non-farm payrolls are expected to increase by 60,000, with the unemployment rate falling back to 4.5% or lower. This moderate improvement is mainly supported by technical factors, such as the return of federal employees.

If the December data indeed shows that the labor market has cooled but not collapsed, the Federal Reserve is likely to hold steady at the January meeting. After all, rates were just cut in December, and the threshold for further rate cuts has already been raised. Data shows that the probability of maintaining the current interest rate in January has reached 88.4%.

What is most worth paying attention to this time is not the employment number but the unemployment rate. Powell mentioned at the December FOMC meeting that the official monthly employment figures might be overstated by about 60,000 jobs, so the number itself has limited reference value.

The key point to watch: if the December unemployment rate remains at 4.6% or higher and does not fall below 4.5%, it will trigger the Sam's Law — which the market views as a recession warning. At that point, the stock market will be volatile, and risk assets will come under pressure. Conversely, if the unemployment rate drops as expected to below 4.5%, this can dispel the concern and boost market confidence.