Source: Institution Name

On January 9, an institutional analysis noted that U.S. December employment growth may slow as companies grow cautious about hiring amid import tariffs and rising artificial intelligence (AI) investment. However, the unemployment rate is expected to drop to 4.5%, which could reinforce market expectations the Federal Reserve will hold interest rates steady this month. Tonight’s nonfarm payrolls report is forecast to show the U.S. labor market remains stuck in the "no hiring, no firing" pattern described by economists and policymakers. This would also confirm the economy is in a phase of no job expansion. Last quarter, economic growth and worker productivity surged—partly driven by a sharp jump in AI spending. Sal Guatieri, senior economist at BMO Capital Markets, said: "This isn’t entirely due to weak demand (economic performance doesn’t look poor)—but companies are very cautious about hiring. This could tie to cost-control efforts, possibly from tariff pressure, or the belief AI-driven automation will boost productivity." (Source: FXStreet)