Good morning, investors. The government releases its December labor market report at 8:30 AM this morning, and Wall Street expects another month of moderating job growth.

That’s the paradox of the recent data — so much of the high level positive developments in the economy are unfolding with cracks beneath the surface.

Let’s dive in.

The US economy is booming with efficiency. 

But that’s not the best news for the labor market.

New numbers out Thursday showed that the economy is indeed booming as individuals become more efficient workers within their companies. 

The Atlanta Fed estimates that real GDP growth will come in at 5.4% for the fourth quarter of 2025.

At the same time, government data show labor productivity surged at an eye-watering 4.9% annual rate in the third quarter, even as hours worked rose just 0.5%. 

That is the arithmetic that Wall Street loves — more output without additional labor. 

It’s close to a Goldilocks setup for both Corporate America and the Federal Reserve.

Productivity-driven growth is less inflationary than growth fueled by hiring sprees and rising wages. It keeps unit labor costs contained, supports profit margins, and makes it easier for policymakers to move forward with rate cuts.

Yet it also means the economy can expand quickly without much job creation.

Indeed, analysts forecast that the US economy added 55,000 jobs in December, which would be lower than the 12-month trailing average of 77,000, according to FactSet.

When efficiency rises this fast, companies can meet demand by doing more with the workers they already employ. 

That means the economy can still run “hot” on GDP even as the labor market cools.

That dynamic helps explain why headline growth can still feel disconnected from the strain facing middle-class households. 

The data describe an economy doing more with less. 

Over time, that is the equation that pushes living standards higher. In the near term, though, it’s a far bigger win for investors and Fed watchers than for workers looking for jobs and pay raises. 

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👀 Trump has a new tactic to lower mortgage rates. The president said he’s instructing his “representatives” to buy $200 billion in mortgage bonds, claiming that doing so will drive rates and monthly payments down. (CNBC)

✂Scott Bessent said Fed should lower rates. The Treasury Secretary said the central bank must “do its part” to boost investment in the economy and ease financing costs: “The White House can only do so much.” (Yahoo Finance)

🏦The Supreme Court could decide on tariffs today. The legality of President Trump’s sweeping trade policies remains up in the air, and if they are struck down it would have massive repercussions for the US fiscal situation and international relations. (CNBC)

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Mike Green is the CIO of Simplify Asset Management. We sat down to discuss his viral essay about the new poverty line being closer to $140,000 than the government-listed $32,000. In this conversation he answers his critics from the right and left, explains the generational divide in the affordability crisis, and more.

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

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