The health of the US labor market directly determines the Federal Reserve's policy direction this year — and this will become increasingly clear in the coming days. The non-farm payroll report will be released this Friday, but before that, investors need to closely monitor the various employment indicators released intensively from today through Friday.

The story of the past 12 months is quite interesting. High tariff policies did not trigger inflation as expected, so the Fed's focus has quietly shifted to another concern — the potential weakness in the labor market. Once there is any movement in this economic fundamental, the next steps in the federal funds rate will be adjusted accordingly.

Before the end of the January FOMC meeting, Fed officials will undoubtedly scrutinize every piece of data released this week word by word. Market expectations indicate that, after months of sluggishness, US official statistics and various alternative indicators will show signs of relative stability in the labor market at the end of last year. These positive signals may set the stage for the December non-farm payroll report from the Bureau of Labor Statistics on Friday.

First, attention should be on the December ADP National Employment Report released tonight at 9:15 PM Beijing time. The market consensus is that private sector employment in December will have added 457,000 jobs, rebounding from a negative growth of 32,000 in November. Notably, ADP employment data in the second half of 2025 has been relatively stable, with recent weekly growth consistently remaining positive.

Macroeconomist Samuel Thomas from Pantheon Macro pointed out that, based on ADP data, in the four weeks ending last month 6, private sector employment performed relatively steadily — providing a reference point for the overall assessment of the labor market.