Jobs banner hangs on the U.S. Chamber of Commerce (Getty)
By Adam Shell , USA TODAY
NEW YORK -- The monthly jobs report and the Federal Reserve will remain closely intertwined in 2014. The first look-see comes Friday when the December employment report is released.
For most of 2013, Wall Street closely monitored the government's monthly report on how many jobs were created to handicap when and if the Fed would begin to dial back, or "taper," its bond-buying program, known as quantitative easing.
But the Fed answered the basic question of taper "timing" at their mid-December meeting when they said that they would start trimming their monthly asset purchases by $10 billion this month, reducing total purchases to $75 billion from $85 billion.
Now, investors will be looking at the jobs report to better gauge the pace and size of QE tapering, says Kevin Giddis, head of fixed income at Raymond James.
When searching for clues, he says, investors should focus on components of the jobs report that offer a snapshot of the economy's health, as well as inflation trends. For example, rather than focus on the headline non-farm payroll number, or the number of jobs created by both private firms and the government, Giddis says to hone in on jobs created solely by private employers.
Why? "It tells you how the economy is really doing," Giddis says. It also tells you whether demand is strong enough for employers to start hiring more aggressively, he says, noting that Fed tapering remains highly data-dependent.