Goldman Sachs Previews Non-Farm Payrolls: Data Needs to Be "Substantially Surprising" to Shake Up Fed's Rate Cut Expectations for April

Jan 9: Goldman Sachs says the December 2025 U.S. nonfarm payrolls report (due Friday evening) is unlikely to materially shift market expectations for Fed policy—unless there’s a significant surprise. Current pricing firmly anchors a mid-year start to policy easing. In a client research note, Goldman Sachs forecasts nonfarm payrolls will rise by ~70k, matching consensus. While unofficial market “whisper numbers” point to modest upside risk, the bank says a near-consensus result will reinforce (not disrupt) the current macro narrative. Markets are pricing in two 25bp Fed rate cuts this year, with the first expected around late April. Goldman Sachs notes labor data would need a “fairly dramatic” upside/downside surprise to meaningfully bring forward or delay this timing. From a market perspective, Goldman Sachs sees 70k–100k payrolls as the most stock-friendly outcome: it aligns with ongoing economic expansion, no reignited inflation fears, and no threat to the rate-cut cycle. This supports the view of a gradual U.S. slowdown (not an abrupt stall). Conversely, payrolls below 50k would be seen as too weak to sustain economic stability, potentially spooking investors with sharp growth slowdown concerns. On the other end, data above 125k could prompt markets to reassess the first cut’s timing, pushing it to June. (FXStreet)