US Labor Market Likely Maintains Solid Growth in January; Annual Revisions to Moderate Historical Hiring Pace

Key Takeaways:

* US payrolls are projected to increase by 170,000 in January, following strong growth in the previous two months.
* The Bureau of Labor Statistics' (BLS) annual revisions are expected to show a moderate pace of hiring over the past few years, adjusting down the initial payroll count by approximately 700,000.
* Despite the revisions, Federal Reserve officials anticipate labor demand to remain robust, supporting the economy.

Market Impact:

* The January jobs report and benchmarking revisions align with the Federal Reserve's view of moderating, yet still healthy labor demand.
* Policymakers kept interest rates unchanged on Wednesday, awaiting further progress on inflation before considering rate cuts.

Other Highlights:

* BLS data is expected to indicate around 8 million job openings in December, similar to the previous month.
* The Institute for Supply Management will release manufacturing and services surveys on Monday and Wednesday, respectively.

Global Economic Outlook:

* Canada's labor force survey will reveal the continuation of strong job gains.
* The UK, India, and Mexico are expected to announce rate cuts.
* Eurozone and Turkey will release inflation data.

Asia-Pacific:

* Factory output data from Australia, Japan, South Korea, and Indonesia will provide insights into manufacturing activity.
* China's Caixin PMI is expected to stay strong, supported by recent stimulus measures.
* India's Reserve Bank is likely to cut its repurchase rate to 6.25%.

Europe, Middle East, Africa:

* The Bank of England is poised to reduce rates for the third time, balancing expansionary needs with inflation concerns.
* The eurozone's consumer inflation rate is projected to remain at 2.4% in January.
* The Central Bank of Turkey expects inflation to decline to 21% by year-end, enabling further rate cuts.

Latin America:

* Chile's GDP-proxy data may indicate slowing economic momentum.
* Mexico's central bank is expected to deliver a rate cut of 25 or 50 basis points, influenced by inflation trends and US trade tariffs.
* Brazil's central bank will publish minutes from its recent meeting, signaling the continuation of 100 basis point rate hikes.