Although overall correlations were poor, negative ADP lowered expectations for December NFP data. The ADP showed that the private sector reduced 123K job positions in December. The business environment uncertainty created by regional closures and high levels of Covid cases stand out as the main factors of this. In this context, the median estimates of the economists on Bloomberg are + 62K for NFP, 6.8% for unemployment rate and 0.2% and 4.5% for wage increases, respectively, on a monthly and annual basis.

In December, employers halted recruitments, presumably due to the lockdown in California and increased cases of Covid. Applications for unemployment reached 837K from the average of 740K in the previous month in December. The increase in NFP in November was 245K. In the December data, although the expectation is a weak increase, the possibility of negative realization seems high.

Data disclosures alone will not be important at this stage, as the autopilot will be available for the predictable period in terms of Fed policies. Anyway, we are likely to see changes in terms of employment change that somewhat remind us of the bad times of the pandemic. Even if vaccination takes place, it will take time for companies to reach the level to make employment investment. That is why it is important to support SMEs in financial incentives. Most Americans who are unemployed will continue to use their paychecks. They are much more likely to save as a precaution against bad days rather than creating a money cycle in the economy. Since we are far from the inflationary phase of monetary incentives and financial incentives, the recent rise in bond yields and break-even inflation levels may stop or come down slightly. In particular, the movement in yields will be normalized by the Fed's open-ended bond purchases, or by an implicit control of the yield curve in the coming months.