What the First Jobs Report in Months Could Tell Us About Economy

Summary

Stuart Paul of Bloomberg Economics discusses the U.S. economic outlook ahead of December payrolls and JOLTS. He sees a relatively high-growth, high-productivity economy with a low unemployment rate and robust hiring, though labor-market churn is shifting to the employer side and real wage growth faces headwinds. He downplays Venezuela's near-term oil-supply impact, flags natural gas and power prices as more important than gasoline for 2026 inflation, and says energy disinflation would not much change the Fed's reaction function.

• Bloomberg Economics expects roughly 80,000 December payrolls and 7.7 million JOLTS openings.
• Guest sees a high-productivity, high-growth U.S. economy with low unemployment and robust hiring.
• Labor-market churn has shifted from employees quitting to employers cutting and rehiring at lower wages.
• Venezuelan oil supply could push oil to $50 and cut headline inflation, but production hurdles make it unlikely.
• Natural gas, power, and electricity demand are seen as more important for 2026 inflation than oil and gasoline.
• Energy-price declines would not much alter the Fed's reaction function because the Fed focuses on core inflation.
• Trade policy and affordability challenges may weigh on Republicans in House races.