All I want for Christmas is a clean labor report

Labor data for October and November was , more or less, in the realm of expectations, and as such the market reaction was relatively subdued. As we wrote in our preview, absent an extreme outcome, the labor data from October and November would not be decisive for the Fed meeting in January. Fed Chair Powell suggested at last week’s FOMC meeting that the Fed will look at the October and November data releases with “somewhat of a skeptical eye” due to the incomplete collection of data and technical distortions . In addition, October’s very negative payrolls print was driven by government workers coming off payrolls, but otherwise solidly in line with the prior three-month moving average. November’s highlight was the uptick in the unemployment rate , which was at least partially invalidated by Powell’s skepticism of the fidelity of the data. December’s numbers (coming out on January 9) will be relatively clean – free of DOGE and shutdown distortions – and will be more instructive about what the Fed will do next.