It’s a big week for jobs data. What it could mean for the Fed and rates.

Over the past year, as higher tariffs failed to trigger a dramatic surge in inflation, the Federal Reserve’s focus has shifted more to concerns over weaker labor conditions—and where that crucial economic pillar could lead the federal-funds rate.

Fed officials most certainly will pore over this week’s data points before their next rate-setting meeting at the end of January. Both federal data and alternative measures are expected to point to a relatively stable end of the year after months of weak performance—which could bode well for the December jobs report from the Bureau of Labor Statistics, due Friday.

Up first is the monthly ADP National Employment Report for December, which will be released Wednesday at 8:15 a.m. Eastern. Economists surveyed by FactSet expect that private employers added 25,000 jobs in December—a rebound from November’s decline of 32,000 payrolls. ADP’s measure of private payrolls has been largely flat during the second half of 2025, though job growth has remained in positive territory for the three weeks ending Dec. 6.

ADP estimated that private employers added an average of 11,500 jobs a week for the four weeks ending Dec. 6. If that pace held steady for the month, that could translate to a December private payroll gain of as much as 45,000 on Wednesday, writes Samuel Tombs, chief U.S. economist with Pantheon Macroeconomics.

In addition to the ADP report, the Bureau of Labor Statistics is scheduled to release its estimate of available job openings in November on Wednesday, as well as the number of Americans who were quit or laid off. The Job Openings and Labor Turnover Survey will be released at 10 a.m. ET.

The number of available jobs swelled in September and October to about 7.7 million, while the total number of workers undergoing job separations was also relatively unchanged. Layoffs rose a bit in October, though the number of Americans quitting remained muted. Due to the delays caused by the government shutdown, both September and October data were released on Dec. 9. So Wednesday’s JOLTS report will be a more normal data set to analyze.

Mike Reid, head of U.S. economic research at the Royal Bank of Canada, expects to see openings tick up to 7.8 million for November. Additionally, the Indeed Job Postings Index—which can be a leading indicator—ticked up in November and remained elevated during the first two weeks of December, the latest data available.

The JOLTS data are typically a bit stale, but the number of job openings is worth watching in particular. It serves as a good approximation of labor demand and can provide some signal for the trajectory of monthly payroll growth.

Bank of America will also release its labor data on Wednesday, and Revelio Labs is set to provide estimates of nonfarm payrolls, salaries, and layoff notices on Thursday. The Labor Department will also release initial jobless claims Thursday.

While these figures provide complementary signals about the health of the labor market, all eyes will be on the unemployment rate in Friday’s jobs report. That’s because Fed officials have signaled that the unemployment rate is a good barometer of labor conditions, amid the noise in the data from the government shutdown and slipping labor supply.

A majority of economists expect the unemployment rate ticked down to 4.5% in December after rising to 4.6% in November.

If the job market does start to perk up, the Fed is more likely to leave interest rates on hold at the coming Jan. 27-28 policy meeting, and that pause could extend out for a sustained period.

Write to Megan Leonhardt at megan.leonhardt@barrons.com