It’s jobs week in the US, and the numbers better not disappoint.

The nascent slowdown narrative which pushed 10-year Treasury yields under 4.25% for the first time since early December is entering its third week. An underwhelming NFP headline, particularly if preceded by a poor read on ISM services (i.e., an ISM readout that “confirms” the signal from S&P Global’s US services PMI) could rekindle “hard landing ” concerns, and we’re not in a “bad news is good news” environment vis-à-vis the Fed-macro nexus.

That latter point’s important. This isn’t a backdrop where risk’s inclined to trade well on soft macro data because soft data increases the odds of Fed cuts. Notwithstanding an ostensibly “benign” read on PCE prices last week, core inflation’s stubborn. Just as concerning for policymakers, inflation expectations have picked up markedly. Barring a Wile E. Coyote moment for the labor market, the Fed’s handcuffed at least until the June FOMC.

Market pricing for 2025 Fed cuts has moved materially — from just ~29bps of easing priced as of February 12 to now ~70bps. But that’s no consolation for equities in the presence of suddenly flagging consumer spending and, relatedly, poor readouts on household confidence and sentiment.

The souring mood’s at least in part attributable to the prospect of mass government layoffs. Some on Wall Street sound pleased with Elon Musk’s handy work, and I suppose that’s to be expected. That’s Wall Street for you: They laugh at, and in a lot of cases, facilitate, Main Street misery, but then when they lose their jobs, they expect Main Street to bail them out. If not, they leap off tall buildings wearing $5,000 suits sobbing all the way down at the injustice of it all. (“What kind of puddle is that?” “That’s a banker.” “Oh God, gross!”)

Consensus is looking for 155,000 from the jobs print. That’d be a modest re-acceleration from January’s slowdown. Recall that revisions released last month found overall job growth for 2024 revised lower, even as the pace was revised sharply higher for November and December.

Naively assuming no revisions, an in-line read would push the three-month average down to 202,000, as November’s strong print falls out of the lookback.

It’s too soon to expect Musk’s layoffs to manifest in the main labor market aggregates. I’m not sure when, where and how, that forced attrition will ultimately show up. But if the administration — and Wall Street — thinks Trump can just hire a private hitman to commit jobs genocide against federal employees and government contractors with no repercussions for the economy, they’re mistaken to put it politely.

Moreover, I can scarcely imagine a worse idea from a societal stability perspective than giving the world’s richest person free rein to unilaterally purge everyday people from their jobs in government. It’s manifestly insane, and make no mistake: History will remember it as such, not as the beginning of a new era defined by “efficient” government.

As alluded to above, markets will be very keen to parse the ISM services update in light of the first contraction on S&P Global’s gauge in two years.

Consensus wants 53 from the ISM headline. If it prints sub-50 instead, look out.

Also on deck in the new week: ISM manufacturing (seen at 50.5), ADP private payrolls (seen at 145,000) and a procession of Fed speakers including Jerome Powell on Friday.

Elsewhere, inflation data’s due in Europe and it’s NPC week in China, which means thousands of apparatchiks will be herded into the Great Hall of the People, where the Standing Committee will tell everyone what growth’s going to be this year (spoiler alert: around 5%).

The dog and pony show in Beijing comes at a critical juncture both for the country and, less importantly, for Chinese tech shares, which stormed into a bull market this year amid hopes that Xi Jinping’s prepared to give China’s mega-caps more rope. (Rope he’ll eventually take back and hang them with.)

Critically, investors want to hear more from the Party on measures to juice domestic demand in China. If they’re short on specifics, or if the fiscal targets don’t look aggressive enough, markets won’t love it. It’s worth noting that although H-shares are up 15% in 2025, Mainland benchmarks are flat if they’re positive at all.