Pantheon Publications

PM Datanote: US Employment, December 2025

Still weak enough to sustain the pressure for more Fed easing.

12 January 2026 US Monitor A March easing is more likely than markets think after jobs data

• The trend in payrolls is unlikely to improve in Q1; catch-up growth in healthcare jobs is now over...
• ...And December’s jump in leisure and hospitality payrolls looks set to unwind, just like a year ago.
• The sharp rise in involuntary part-time working is a red flag, signaling that layoffs will pick up in Q1.

9 January 2026 US Monitor Do flat jobless claims signal the unemployment rate is stabilizing?

• Unadjusted initial and continuing jobless claims are almost unchanged from a year ago...
• ...But this is partly due to low seasonal hiring; claims also miss rising youth and long-term unemployment.
• The Q3 productivity jump merely returns it to trend; tariffs and immigration curbs will limit growth in 2026.

8 January 2026 US Monitor JOLTS data unable to shine light on the biggest labor market questions

• JOLTS hiring less separations ought to provide a useful cross-check on payrolls, but the track record is poor.
• Small business openings remain low, but they lag the NFIB hiring index too much to refute its recent pick-up.
• The inclusion of retailers means the ISM services survey provides a useful steer on tariff-driven inflation.

7 January 2026 US Monitor Core CPI likely jumped in December as data collection issues unwound

• We look for a 0.3% increase in the December core CPI, with the risks skewed strongly towards a 0.4% print.
• Late data collection biased downwards the November CPIs for core goods and lodging away from home...
• ...These CPIs will rebound in December, alongside a big rise in airline fares and possibly auto insurance.

6 January 2026 US Monitor Tariff revenues are starting to fall, further improving the CPI outlook

• Tariff revenues fell in December and remain well below levels expected by independent fiscal watchdogs. 
• Nearly all of the boost to consumer prices from the tariffs has filtered through; the outlook is benign.
• Home sales are likely to recover in 2026 as mortgage rates fall, but still fall short of pre-pandemic levels. 

5 January 2026 US Monitor December labor market data to maintain pressure on FOMC to ease

• We look for a modest 75K rise in payrolls and a small fall in the unemployment rate to 4.5% in December.
• Retailers and hospitality firms hired cautiously; consumers continue to report worsening job availability.
• The FOMC still looks likely to pause in January, but the case for easing again will be robust by March.

22 December 2025 US Monitor Birth-death model is only partly to blame for big benchmark revisions

• Only a small fraction of the big downward benchmark revision to payrolls is due to the birth-death model. 
• The sectoral mix of the revision implies benchmarking is removing only a few unauthorized workers.
• The main problem—still unresolved—is the BLS is not obtaining a representative sample of firms.

19 December 2025 US Monitor November CPI data strain credulity, but the outlook is tranquil

• Measurement issues depressed November goods prices, airline fares, rent and auto insurance....
• ...We see no evidence of a slowing in the trend in core-core services prices yet.
• But the outlook looks benign; tariffs are now mostly passed through, while wages and rents are slowing.

PM Datanote: US Employment, November 2025

Lackluster, but not alarming enough for a January easing.

18 December 2025 US Monitor Is the NFIB survey's signal of rising hiring intentions credible?

• The NFIB survey’s hiring intentions index increased in November to its highest level since May 2023... 
• ...But first estimates of private payrolls have undershot its implied level by 50K on average since Q1.
• The regional Fed surveys and the Census Bureau’s biweekly business survey show weaker hiring plans.

17 December 2025 US Monitor Undesirably high unemployment to remain the Fed's main worry in 2026

• Private payrolls are no longer slowing and the jump in unemployment was mostly due to the shutdown.
• Unemployment ex-temporary layoffs, however, is above its pre-Covid norm, and wider slack is building.
• Some indicators of hiring indicators have improved recently, but layoff plans also have picked up.

16 December 2025 US Monitor November CPI data unlikely to ruin the festive mood

• Core CPI inflation likely fell to 2.9% in November, slightly below consensus, from 3.0% in September.
• Auto prices have remained unaffected by tariffs; increases in other goods prices have slowed.
• The rebound in airline fares probably has petered out; rent increases likely continue to slow gradually. 

15 December 2025 US Monitor November employment report to sustain pressure on the Fed to ease

• We expect a first estimate of a mere 50K rise in November payrolls, despite slightly better surveys...
• ...Retailers have hired relatively few seasonal workers; the upward bias in the first estimate should be mild.
• The unemployment rate likely ticked up to 4.5% in November, from 4.4% in October.

12 December 2025 US Monitor Weak October retail sales likely to set the tone for Q4

• We think retail sales dropped by a hefty 0.7% in October, dragged down by a big fall in auto sales. 
• A raft of indicators suggest that consumers’ spending will grow at a negligible pace in Q4. 
• The Thanksgiving week drop in continuing claims is a seasonal fluke; the trend remains upwards.

11 December 2025 US Monitor Expect a brief skip in the Fed's easing cycle, not a long hiatus

The dots imply three regional Fed presidents who will
vote in 2026 disagreed with this meeting’s easing...

...But we reckon all the permanent voters expect to
ease in 2026; labor data will trigger March action.

Year-over-year growth in the ECI was stable at 3.6%
in Q3, but leading indicators signal a sharp fall soon. 

10 December 2025 US Monitor FOMC likely will signal a Q1 pause, but only tentatively

• Investors already expect a two-meeting hiatus in the easing cycle; the FOMC will not signal a longer wait.
• Recent data surprises have reinforced the case for easing; much more data will be available in January.
• We expect 75bp of easing in 2026, but fiscal policy and FOMC personnel changes cloud the outlook.

9 December 2025 US Monitor Weaker labor demand is more than offsetting the immigration hit

• Immigration has slowed sharply this year, but the labor force likely still is growing, slowly.
• The recent upward creep in unemployment implies labor demand has slowed by more than supply.  
• Higher unemployment will squeeze wage growth and keep the pressure on the FOMC to continue easing.