The global market remains cautious after the slowdown in American employment

Disappointing US Jobs Data Shift Geopolitical and Economic Balances

Last month brought significant surprises in American macroeconomic data, with the Department of Labor reporting only 50,000 new jobs added in December, below analysts’ expectations of 70,000 new positions. This performance also represents a decrease compared to the 56,000 jobs recorded in the previous month.

However, the most unexpected figure concerns the unemployment rate, which fell to 4.4% from previous 4.6%, suggesting a more resilient labor market than hiring numbers indicate. Economists remain divided in interpreting these conflicting signals.

Reactions of Global Stock Markets

World stock markets responded with moderate optimism to this mix of weak employment growth data. The S&P 500 reached a new all-time high, rising about 0.7% to 6,967.73 points, while the Dow Jones Industrial Average advanced 0.5% to 49,441.30. The Nasdaq Composite gained 0.8%.

In the UK, the FTSE 100 ended the week at record levels, up 0.8% to 10,124.60 points, mainly supported by news of a possible mega-merger between Glencore and Rio Tinto. Glencore shares jumped 9%, while the FTSE 250 maintained its positive trend with a 0.3% increase.

In Europe, major indices followed the positive trend: the French CAC 40 rose 0.8%, and the German DAX gained 0.4%. In Asia, the Japanese Nikkei 225 increased by 1.6%, driven by the performance of Fast Retailing, parent company of Uniqlo.

The Healthcare Sector: Once Again the Employment Driver

US employment growth, despite being weakened by import tariffs and massive investments in artificial intelligence, received support from the healthcare sector. The sector generated 21,000 new jobs in December, of which 16,000 were in hospitals. Overall, the healthcare sector created an average of 34,000 positions per month in 2025, down from 56,000 in 2024.

Without this boost from the healthcare sector, the US private sector would have contracted since the tariffs were introduced in April. Conversely, retail trade experienced its worst month for hiring, losing 25,000 jobs.

Implications for Monetary Policy

Contradictory employment data have fueled debate about the Federal Reserve’s future actions. Many market participants, such as those represented by Goldman Sachs, believe that the larger-than-expected decline in unemployment suggests a stabilization of the labor market. Lindsay Rosner of Goldman Sachs noted that the improvement could indicate that recent increases in unemployment were due to temporary factors rather than structural weaknesses.

Consequently, financial markets have significantly reduced bets on rate cuts by the Federal Reserve. Currently, expectations see almost zero chance of a cut in January, and the prospects for two cuts during the year have halved, although a second cut remains expected by October. Stephen Brown of Capital Economics emphasized that, with robust GDP growth in the fourth quarter, the Fed should not rush to further lower rates.

The Rebound of Safe-Haven Assets

Labor data triggered strong movements in precious metals and energy markets. Gold rose 1.4% to $4,511 per troy ounce, up 4% for the week, while silver jumped 5% to $79.79 per ounce, gaining 9% over the weekly period.

In the energy sector, West Texas Intermediate (WTI) crude oil increased 2.8% to $59.36 per barrel, while Brent rose 2.4% to $63.46. These gains were partly fueled by geopolitical tensions in Iran, where Trump issued an ultimatum against potential damage to protesters.

Major oil companies benefited from these movements: Chevron rose 1.2%, ExxonMobil 0.5%, BP over 2%, and Shell about 3%.

International Currency Dynamics

The US dollar appreciated significantly in international exchange rates. The British pound fell 0.3% below $1.34, while the dollar reached a one-year high against the Japanese yen. Investors welcomed both the absence of a Supreme Court decision on tariffs and better-than-expected labor market data.

Geopolitical Uncertainty Around Presidential Tariffs

The Supreme Court did not issue the expected ruling on Trump’s “Liberation Day” tariffs, creating a suspension that characterized the entire trading day. Market forecasts suggest only a 25% chance that the court will confirm the president’s emergency tariff powers. However, analysts note that there are alternative legal avenues for applying tariffs, and sector-specific measures like those on steel and aluminum would not be affected by the ruling.

Kevin Hassett, Trump’s chief economic advisor and potential candidate to lead the Federal Reserve, downplayed concerns, stating that the US has alternative strategies if the court rules against the president’s tariffs. He emphasized that the economy is growing vigorously, with inflation under control despite recent slowing in hiring.

Expert Outlooks

Chris Zaccarelli, Chief Investment Officer of Northlight Asset Management, offered an interpretation of the employment picture reflecting the ambiguity of the moment: “Companies seem to be holding onto employees longer, avoiding rapid layoffs, but are not expanding the workforce quickly either. This report fuels concerns about a stagnant environment for hiring and layoffs.”

According to Berenberg, the US labor market avoided an “apocalyptic scenario” thanks to the larger-than-expected decline in unemployment. The Swiss bank now expects the Fed to cut rates only once this year. Atakan Bakiskan of Berenberg highlighted that the previous increase in unemployment was mainly concentrated among teenagers, an anomaly that distorted overall data.

Wealth manager Quilter Cheviot reiterated that the US labor market remains much weaker than in previous years, with hiring concentrated in specific sectors like healthcare and hospitality, while retail continues to suffer.

The European Macro Context

In the UK, yields on British government bonds are experiencing their largest weekly decline in nine months, as investors anticipate further rate cuts from the Bank of England. The 10-year gilt yield fell from 4.54% to 4.39%, while the 30-year yield declined from 5.28% to 5.12%.

Giles Gale of UBS expects further rate reductions and believes the UK could outperform its international competitors in the coming period.

US Consumer Sentiment

Despite evident concerns about the labor market, US consumer confidence has slightly improved. The University of Michigan’s Index of Consumer Sentiment rose 2.1% in January to 54, although it remains nearly 25% below last year’s level. The report highlighted improvements among low-income households, while sentiment among higher-income groups declined.

Outlook and Open Questions

The US economy is in a transitional phase characterized by mixed signals. While employment data reveal a slowdown in hiring, the decline in unemployment and strong GDP growth in the fourth quarter suggest greater resilience than market headlines might imply. Tariff policies, accelerated investments in artificial intelligence, and potential Supreme Court actions remain key variables that will continue to shape the economic trajectory in the coming months.