On Friday, the December Non-Farm Payrolls data will be released. This is the first major economic report of the year, and all major institutions and traders are paying close attention.

Let's look at the expected figures—non-farm employment is forecasted to increase by 55,000, down from 64,000 last month; the unemployment rate is expected to decrease from 4.6% to 4.5%; and average hourly earnings growth is projected to rise from 3.5% to 3.6%. At first glance, these numbers seem contradictory: employment is declining, suggesting the labor market is cooling, but the unemployment rate is falling, indicating the market is healthy. This contradiction is quite significant.

So, which should we focus on? I think the unemployment rate. The reason is simple—non-farm employment has already been at relatively low levels for some time, so its reference value is limited, whereas the unemployment rate can more accurately reflect the overall health of the labor market. This data usually has a greater impact on the dollar.

If the data shows the labor market weakening, expectations for the Federal Reserve to cut interest rates next will likely rise, leading to a weaker dollar and a more accommodative financial environment, which is good for the stock market. Conversely, if the data indicates the labor market remains strong, the market may move in the opposite direction.

Our view is that unless non-farm employment shows negative growth or deviates from expectations in a particularly extreme way, the unemployment rate will be the main focus on Friday.