On 16 December 2025, the much-watched U.S. November nonfarm payrolls report was published. Delayed by the federal government shutdown, the data clearly depict a labor market that is “gradually cooling.” At the same time, conflicting signals stronger than expected job gains alongside a sharp rise in unemployment are reinforcing a familiar trading narrative: “bad news is good news,” where weaker labor data could encourage the Federal Reserve to cut rates sooner.
However, this report also casts a shadow over the economic outlook and is shifting part of the market’s focus to an upcoming political event: President Trump’s nationwide address, which is expected to provide key clues about upcoming changes in Fed leadership and the broader direction of economic policy.
Deep Dive into the November Jobs Data
The latest report’s key indicators highlight both the complexity and the softening trend in the labor market.
Key Indicator | Actual Data | Market Expectation | Data Interpretation & Impact |
November change in non-farm payrolls | +6.4 ten-thousand people (≈ 64,000) | +5.0 ten-thousand people (≈ 50,000) | Surface “good news”: Job growth beat expectations, mainly driven by healthcare and construction. However, the increase was modest, and there has been virtually no net job growth since April. |
November unemployment rate | 4.6% | 4.4% | Underlying “bad news”: Highest level since September 2021 (about four years), indicating it is becoming harder to find a job. |
October change in non-farm payrolls | -10.5 ten-thousand people (≈ -105,000) | -2.5 ten-thousand people (≈ -25,000) | Largest decline since late 2020, mainly caused by delayed departures of federal government employees after the shutdown ended. |
Average hourly earnings (YoY) | 3.5% | 3.6% | Growth has slowed to the lowest level since May 2021, suggesting easing wage-inflation pressures. |
At the heart of the report is a stark divergence between job creation and the unemployment rate. Professional analysis offers deeper perspective on this contradiction:
Data Quality and Underlying Trend
Fed Chair Jerome Powell has previously expressed skepticism about the headline employment figures, suggesting they may be overstated. Analysts at CITIC Securities note that, using Powell’s adjustment framework, November’s true job gains are close to zero—hardly “strong.” Over the past three months, average monthly job growth has been just 22,000, well below the “equilibrium rate” needed to meet normal labor-force demand.Fragility in Labor Market Structure
The report also reveals signs of a “K-shaped” divergence, with the wage growth gap between low-income and high-income households widening. Meanwhile, the number of people working part-time for economic reasons surged by 909,000 in a single month, suggesting many workers are unable to secure full-time employment and that overall job quality is deteriorating.
Market Reaction: Trading the “Cooling Growth → Easier Fed” Logic
After the data release, financial markets reacted quickly based on the “economic cooling → more Fed easing” logic:
Asset Prices:
The U.S. Dollar Index fell below the 98 level, U.S. equity futures moved higher, and gold edged up. This reflects investors’ belief that weaker labor data will encourage the Fed to maintain—or even accelerate—its easing pace.Rate Expectations:
Although markets still see only a relatively low probability of an immediate rate cut at the Fed’s January meeting (roughly 24.4%–31% after the data), expectations for rate cuts in 2026 remain intact. Fed funds futures are pricing in two cuts in 2026, for a total easing of about 58 basis points.
Strategists at Citi argue that a Fed that remains supportive of rate cuts is a key pillar for equity markets. CITIC Securities expects the Fed may pause rate cuts in January to assess incoming data, with one more cut likely before Powell’s term ends.
Markets Turn to Trump’s Nationwide Address
President Trump will deliver a nationwide address at 10:00 a.m. Beijing time on 18 December. Markets expect the speech to touch on several key issues with potentially significant impacts:
Next Fed Chair
This is the single most watched topic for financial markets. Treasury Secretary Besant said on 16 December that a new Fed Chair is expected to be appointed in early January. Previously, Trump described former Fed Governor Kevin Warsh as the “top candidate,” while also expressing approval of White House economic adviser Hassett. The latest reports suggest Trump will interview another leading contender—current Fed Governor Waller—on the 17th.Any clear signal or directional hint on the nomination will directly shape market expectations for the Fed’s policy independence and tilt (hawkish or dovish) over the coming years.Trade and Tariff Policy
History shows that Trump’s remarks on trade often spark market volatility. Although some tariffs have recently been rolled back, whether there will be any substantive shifts in his core protectionist stance will have implications for global supply chains, inflation dynamics, and corporate earnings outlooks.Broader Economic Policy Direction
If the speech outlines large-scale fiscal stimulus, tax cuts, or infrastructure plans, it could boost risk sentiment in the short term—but would also intensify longer-term concerns about U.S. fiscal deficits and debt sustainability.
Overall, the November jobs report reinforces the narrative of a cooling labor market while keeping hopes of future Fed easing alive. At the same time, markets are bracing for Trump’s upcoming address, which may reshape expectations around the Fed’s leadership, policy trajectory, and broader macro environment.
