Weak US jobs report forces Fed to accelerate rate cuts: deVere

ATLANTA: US employers added just 50,000 jobs in December, and with hiring momentum fading fast, the Federal Reserve now faces mounting pressure to accelerate interest-rate cuts at its next meeting rather than continue with cautious, incremental easing.

This is the warning from Nigel Green, CEO of global financial advisory giant deVere Group, as today’s labor data transforms the rate debate.

“The Federal Reserve already began easing, but December’s employment numbers need to change the nature of that easing,” he says.

“Early cuts were about calibration. What comes next is about protection. When job creation slows to this level, policy cannot remain incremental. The pace must increase.”

He adds: “This moment demands a new urgency. The risk profile of the US economy has shifted, and monetary policy must move faster to keep up.”

Hiring slowed sharply through the final quarter, leaving last year among the weakest periods for employment expansion outside downturn conditions.

Employers across multiple sectors are delaying recruitment plans, citing cost pressures, policy uncertainty, and tighter financial conditions.

“Businesses are not shedding workers at scale, yet they’re refusing to add new ones,” says the deVere CEO.

“This is how slowdowns deepen. Momentum fades quietly before damage becomes visible.”

The unemployment rate dipped to 4.4%, yet Nigel Green argues that figure masks the true state of labor demand.

“Unemployment numbers lag reality,” he says.

“Payroll growth tells the forward story. Hiring at this pace points to fragility, not strength. Participation remains soft, pipelines are thin, and confidence is slipping.”

Inflation trends strengthen the case for faster action. Price pressures have eased significantly from their peaks, with goods inflation cooling and services inflation showing consistent moderation.

“The inflation fight has moved into a different phase. Rates designed for crisis control now sit on top of an economy losing traction. Holding policy tight under these conditions magnifies the downside risk.”

He continues: “Central banking works best when action stays ahead of damage. Delays convert manageable slowdowns into extended stagnation.”

Financial conditions remain restrictive for households and firms, particularly outside large corporates.

“Credit remains expensive,” Nigel Green explains. “Small and mid-sized businesses feel it first. When borrowing costs stay elevated, investment slows, hiring freezes follow, and confidence drains from the system.”

Structural changes are also reshaping labor demand.

“Automation and AI improve productivity, yet they suppress near-term job creation,” he notes.

“Economic policy must reflect that shift. Labor markets no longer respond to rate changes the way they did a few years ago.

“The Fed will continue easing, but the tempo needs to changes now,” he says. “Incremental moves belong to a different stage of the cycle. December’s data forces acceleration.”

Nigel Green believes the broader path for rates is becoming clear.

“Three reductions before the end of the year stands as the base case,” he says.

“Employment weakness, cooling inflation, and restrictive financial conditions create a powerful case for faster adjustment.”

Delaying action carries consequences, he warns.

“History teaches us that central banks rarely get it wrong from moving a little early.

December’s employment report, therefore, marks a defining inflection point.

He concludes: “Economic signals now argue for speed. The task ahead involves protecting momentum before erosion becomes embedded. The jobs data leaves little room for delay.”