Summary
United States: More Data, More Questions
- The latest employment and inflation data don’t materially change the economic narrative, though they do bring some questions on data quality. Ultimately, the jobs market continues to steadily moderate, and consumer inflation is softening, just not to the degree that the November data suggest. We continue to expect the Fed will hold in January.
- Next week: GDP (Dec 23), Productivity (Jan 8), Employment (Jan 9)
International: Global Central Banks Make Final Rate Calls of 2025
- As 2025 winds down, global central banks remain far from idle. This week, the Bank of Japan raised rates, while the Bank of England and Banxico cut theirs. Most others—including the European Central Bank, Riksbank and Norges Bank—kept rates unchanged.
- Next week: Canada GDP (Dec 23), China PMIs (Dec 31)
Topic of the Week: Federal Employment Nosedives in 2025
- Coming into 2025, there were major questions about how much the incoming Trump administration would reduce the federal workforce. Through November, federal civilian employment has shrunk by 271K since the start of the year, a 10% decline. This represents one of the largest reductions in federal employment in recent memory, and it has reduced nonfarm payroll growth by roughly 23K per month this year.
