Nonfarm Payrolls Expected to Rise by Only 40,000 in November
CPI Inflation Rate Forecast at 3.1%
Caution Grows Amid Ongoing Labor Market Weakness and Inflationary Pressures
"Moderate Slowdown in Employment Could Lead to Dovish Monetary Poli
The three major indices of the U.S. stock market showed mixed movements on December 15 (local time). Ahead of the release of key economic indicators such as employment and inflation this week, heightened caution in the market led to the early gains being reversed, resulting in repeated fluctuations. Concerns that the labor market is slowing down while inflation remains persistently high are weighing on the stock market.
On the 15th (local time), a trader is working on the trading floor of the New York Stock Exchange (NYSE) in the United States. Photo by EPA
As of 10:52 a.m. on the same day at the New York Stock Exchange, the Dow Jones Industrial Average, which focuses on blue-chip stocks, was up 11.67 points (0.02%) at 48,469.72 compared to the previous trading day. The S&P 500 Index, which tracks large-cap stocks, rose 2.05 points (0.03%) to 6,829.46, while the technology-heavy Nasdaq Index fell 52.085 points (0.23%) to 23,143.084.
By stock, Nvidia was up 0.94%. Apple declined by 1.6%, and Microsoft (MS) dropped 0.91%. Among financial stocks, Goldman Sachs and Morgan Stanley rose 1.27% and 1.14%, respectively, showing strong performance together.
The stock market was weak last week. Oracle's earnings slightly missed market expectations, and the company raised its capital expenditure outlook, which fueled concerns about the monetization of artificial intelligence (AI) investments. As a result, AI-related stocks fell across the board. Due to this, the S&P 500 Index declined by 0.6% last week, and the Nasdaq Index dropped by 1.7%. Only the Dow Jones Industrial Average, which has a relatively lower proportion of technology stocks, rose.
Ed Yardeni, President of Yardeni Research, stated, "The 'Magnificent 7' of the S&P 500 (Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta, and Tesla, known as the M7) have begun to lose their previously dominant positions as AI competition intensifies." He further analyzed, "For this reason, it may be difficult for them to maintain their current status in 2026." He added, "The beneficiaries of this competition are likely to be the remaining 'Impressive 493' companies included in the S&P 500, excluding the M7."
The market is paying close attention to major economic indicators to be released this week. The U.S. Bureau of Labor Statistics (BLS) will release the November employment report on December 16. According to financial information provider Morningstar, nonfarm payrolls in November are expected to increase by 40,000 from the previous month, and the unemployment rate is projected to reach 4.4%. This is a significant slowdown compared to the increase of 119,000 in nonfarm payrolls in September. Amid tariff policies and economic uncertainty, companies are becoming more cautious about new hiring, signaling a gradual slowdown in the labor market.
However, some analysts suggest that a slowdown in employment could raise expectations for monetary easing.
Chris Larkin, Managing Director at Morgan Stanley E*TRADE, said, "The Fed is still focusing more on labor market weakness than on inflation," adding, "When it comes to the employment report, bad news could actually be good news for the market." He continued, "As long as employment does not contract sharply, a moderate slowdown in employment could drive the Fed's dovish (monetary easing-oriented) policy."
On the other hand, inflationary pressures are still expected to be significant. The Consumer Price Index (CPI) for November, to be released on December 18, is forecast to show both headline and core CPI rising 3.1% year-on-year, a slightly larger increase than September's 3.0%. The retail sales index for October, to be released on December 16, is expected to show a 0.1% increase from the previous month, and whether this moderate growth trend will continue remains to be seen. In September, retail sales increased by 0.2%.
In addition, the S&P Global Manufacturing and Services Purchasing Managers' Index (PMI) for December will be released on December 16, weekly initial jobless claims on December 18, and existing home sales data for November on December 19. Through the successive release of these indicators, it will be possible to gauge the overall state of the U.S. manufacturing, employment, and housing markets.
U.S. Treasury yields are on a downward trend. The yield on the 10-year U.S. Treasury note, the global benchmark for bond yields, fell by 3 basis points (1bp = 0.01 percentage points) from the previous trading day to 4.15%. The yield on the 2-year U.S. Treasury note, which is sensitive to monetary policy, also dropped by 3 basis points to 3.49%.
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