US December non-farm payrolls +50K vs +60K expected

The US non-farm payrolls for December came in at +50K, significantly below the expected +60K, leading to reactions in the market. Prior payrolls were revised down from +64K to +56K, with October's figures also revised from -105K to -173K. The unemployment rate was reported at 4.4%, also lower than the anticipated 4.5%, although this drop was partially attributable to people exiting the labor force. The participation rate stood at 62.4%, while the U6 underemployment rate improved to 8.4%. However, the change in private payrolls was disappointing at +37K, well below expectations, and manufacturing payrolls saw a decline of -8K. The data prompted a broad USD sell-off, with USD/JPY quickly dropping to 157.44. The market had priced in a 12% chance of a rate cut in January and a 40% chance for the March meeting, indicating a shift in investor sentiment.