According to the US Labor Department's Nonfarm employment report last Friday, the increase in jobs last December was average. Economists interviewed by various news sources predicted that 400,000 more jobs would be added to payrolls last month, but the actual figure was only about half the forecast – additional 199,000 jobs.

MarketWatch said that the US created 199,000 new jobs in December, which indicates that persistent labor shortages are holding back economic growth. Employment growth was under Wall Street's expectations. Economists surveyed by The Wall Street Journal predicted 422,000 new jobs. Meanwhile, the US unemployment rate fell from 4.2% to 3.9%. It can be recalled that this figure was 3.5% just before the pandemic.

Current economic trends continue to keep inflationary pressures high. In an interview with MarketWatch, Wolfpack Capital's chief investment officer Jeff Wright said his biggest concern is not the number of jobs, but the wages. According to him, if the Fed is more worried about inflation, then this report is problematic, but if the Fed appreciates the higher employment rate and is trying to restore the previous figure, then the report isn't.

After reflecting on the extremely hawkish subtext in the minutes of the Fed's December meeting, market participants will look forward to what the Fed will say at the January meeting, which starts on January 25th and ends the next day, on the 26th.