The December employment report has just been released, and the data is indeed not very optimistic—non-farm employment increased by only 50,000 jobs, and the three-month average of private sector hiring has fallen to 29,000, the second-lowest level this year. It sounds quite alarming, right?

However, interestingly, the unemployment rate has actually decreased slightly, temporarily easing market concerns about a worsening labor market. It is precisely because of this anxiety that the Federal Reserve has cut interest rates in three consecutive meetings. The current situation is: weak hiring on one hand, but no significant deterioration in unemployment, which makes the situation a bit complicated.

From market expectations, the Federal Reserve is likely to continue observing at the January 27-28 meeting and will not take further action. But the problem is, this set of weak hiring data also means that the debate over whether the U.S. labor market is healthy or not is far from over. For us traders, the Fed’s next move directly affects liquidity and asset valuations, and the game behind this data is worth paying close attention to.