(Bloomberg) — The US labor market probably kicked off 2025 with another month of solid growth, while highly anticipated annual revisions are likely to showcase a noticeably more moderate pace of hiring over the past few years.
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Payrolls increased by 170,000 in January after larger advances over the prior two months, when the labor market was recovering from the impacts of hurricanes and a major strike, according to the median projection of economists surveyed by Bloomberg.
The monthly jobs report on Friday will also include annual revisions from the Bureau of Labor Statistics. The agency will align the level of payrolls from March of last year to a more comprehensive job count from a quarterly survey derived from unemployment insurance programs.
In August, a preliminary estimate from the BLS indicated its payrolls count in the year through March was overstated by more than 800,000. Revisions to the quarterly survey since then, however, show a smaller adjustment is likely.
The benchmark revisions will also include adjustments for business births and deaths which play a role in BLS payrolls revisions since March.
What Bloomberg Economics Says…
“As part of the BLS’s annual benchmarking exercise, the employment level for March 2024 will likely be revised down by about 700k — less than the preliminary benchmark estimate of -818k. Updated forecasts for the ‘birth-and-death’ model should lower December’s employment level by another 234k. Altogether, last year’s average monthly job growth should fall from 182k to an estimated 148k after the revisions.”
—Anna Wong, Stuart Paul, Eliza Winger, Estelle Ou & Chris G. Collins, economists.
For Federal Reserve officials, the expected outcome of the January jobs report and the benchmark revisions will likely be consistent with their view that labor demand is moderating, though still strong enough to underpin the economy.
Policymakers, nodding to resilient employment growth, kept interest rates unchanged on Wednesday as they await further progress on inflation before reducing borrowing costs further. A number of Fed officials, including governors Philip Jefferson, Michelle Bowman and Adriana Kugler, speak in the coming days.
Among other data, a BLS report on Tuesday is expected to show about 8 million job openings in December, little changed from a month earlier. The Institute for Supply Management will release January manufacturing and services surveys on Monday and Wednesday, respectively.
In Canada, the January labor force survey will show whether surprisingly strong job gains continued into the new year. Trade data for December will reveal the latest surplus with the US, which President Donald Trump views as an irritant despite being driven by cheap Albertan crude shipments.
Elsewhere, likely rate cuts from the UK to India to Mexico, and inflation data from the euro zone to Turkey, will be among the highlights.
In Asia, factory output data on Monday from a number of countries, including Australia, Japan, South Korea and Indonesia, will provide an insight into manufacturing activity at the start of the year.
Also on Monday, Australia’s retail sales for December will show if the shopping spree seen in the second half of 2024 continued.
Indonesia will release its consumer price data for January — the month it surprised investors with a rate cut. Thailand and the Philippines also report inflation this week.
On Wednesday, Caixin PMI from China will show if activity stayed strong following a rapid expansion in December that was helped by Beijing’s stimulus blitz. Singapore and India report PMIs for January the same day.
In New Zealand, quarterly jobs and wages data will provide an indication of the health of the country’s labor market. The data will be a key input for the Reserve Bank of New Zealand’s February policy meeting, when it’s expected to continue cutting rates aggressively.
Japan will release wage data for December on Wednesday, amid a focus on whether upcoming pay negotiations between companies and unions will lead to the kind of strong outcome that the Bank of Japan expects to see.
Thursday will see trade data from Australia and Vietnam. The latter will also publish figures on consumer prices, retail sales and industrial production.
On Friday, the Reserve Bank of India is expected to embark on an easing cycle with a cut in its repurchase rate to 6.25%.
The Bank of England is likely to deliver its third rate reduction of the current cycle, another cautious step toward easing constriction on the British economy.
With services inflation at still more than twice its 2% target and pay growth buoyant, UK central bank officials are weighing the need to aid expansion against the danger of letting consumer-price pressures return. Investors will watch for signals on the pace of future moves, as well as for the vote tally, showing how strong a consensus officials have on the need for easing.
In the euro zone, where the European Central Bank just cut borrowing costs for the fifth time, the first inflation reading of 2025 will be released on Monday. With January results for German and France stable, the overall number for the region is likely to stay unchanged, at 2.4%.
Also of note will be national manufacturing data. In Germany, factory orders on Thursday and industrial production on Friday will show if the multi-year downturn in Europe’s largest economy is bottoming out. Trade figures will reveal the extent of its surplus with the US — a sore point for Trump.
French industrial numbers are scheduled for Wednesday, followed by Spain’s report on Friday.
Comments by ECB officials in the wake of the rate decision may also draw attention. Chief Economist Philip Lane will speak on Tuesday, while Vice President Luis de Guindos is on the calendar for Friday.
In the Nordics, Sweden’s Riksbank on Tuesday will release minutes of its Jan. 29 decision, when it cut borrowing costs and signaled a halt to easing for now. Consumer-price data will be published two days later, revealing if the inflation measure targeted by officials remains comfortably below 2% for an eighth month.
Looking south, data on Monday will probably show Turkish inflation slowed to 41% in January. The central bank is hoping that it weakens rapidly to hit 21% by year-end, enabling it to continue an easing cycle that started in December.
Aside from the BOE, several other monetary decisions are due in the region:
The Bank of Mauritius on Tuesday will likely cut rates, as inflation is within its 2%-to-5% target range and is expected to remain benign because of lower global oil prices and a stronger rupee.
The Polish central bank will probably keep borrowing costs unchanged on Wednesday. Governor Adam Glapinski briefs reporters the following day.
Also on Wednesday, Icelandic policymakers are likely to cut rates. Local lenders Landsbankinn hf and Islandsbanki hf each predict a half-point reduction.
Kenya may also lower borrowing costs on Wednesday. Its real rate is one of the world’s highest, and inflation is forecast to stay below the 5% midpoint of the target range for the next couple of months.
Uganda will likely be less bold when it delivers its decision on Thursday, leaving the benchmark unchanged at 9.75% as price growth continues to inch up.
Also on Thursday, the Czech central bank is widely anticipated to reduce its rate by a quarter point.
Rate meetings are also scheduled in Armenia and Moldova.
Chile posts December GDP-proxy data, likely to confirm that the economy is losing momentum. Fourth-quarter growth may undershoot central bank forecasts even as sticky inflation readings have sidelined the central bank for now.
Seventeen of 30 analysts surveyed by Citi expect Banxico to deliver a fifth straight quarter-point rate cut, while the other 13 see a 50 bps cut. With inflation back in the target range and the economy downshifting, policymakers have indicated they’ll consider larger rate cuts.
One big caveat: Should Trump move ahead with tariffs on the US’s No. 1 trading partner, an outright pause is hardly out of the question.
Brazil’s central bank on Tuesday posts the minutes of its Jan. 28-29 meeting, the first overseen by new chief Gabriel Galipolo.
After delivering a second straight 100 basis-point hike, to 13.25%, the board repeated prior guidance that at the very least they’ll maintain that pace at their next meeting in March. Twelve-month inflation expectations in the central bank’s Jan. 24 Focus survey surged 51 basis points, the biggest weekly increase since 2003.
Consumer prices likely sped up in Chile last month while edging lower in Colombia and slowing dramatically in Mexico.
None of the economies is expected to have inflation back to target before the second quarter of 2026 at the earliest.
—With assistance from Laura Dhillon Kane, Monique Vanek, Piotr Skolimowski, Paul Wallace, Ragnhildur Sigurdardottir, Robert Jameson, Swati Pandey, Tom Rees and Shamim Adam.
