**********On Friday, the market received the first non farm payroll data of Trump's new term. The current market expects non farm employment growth of 170000 in January, which is less than the 256000 jobs added in December. The unemployment rate is expected to be 4.1%. However, after Trump took office in January, he implemented strong immigration policies and experienced a huge wildfire, which may affect Friday's data.

Gaurav Mallik from Pallas Capital Advisors said that as long as Friday's employment report shows that 170000 to 200000 new jobs were added in the month, the market should be able to digest this data without causing significant market volatility

He added, "But if the data we see is much stronger than this, it may eliminate the possibility of the Federal Reserve cutting interest rates this year. If the data is much lower than this, it may raise concerns about a weak labor market

UBS economist Sonia Meskin said that January non farm payroll data often has seasonality, weather effects, and is also affected by the California wildfires.

Since January 7th, the two large-scale wildfires in the Los Angeles area, "Eaton" and "Palisade," have been 100% controlled on January 31st, but there are still sporadic fires burning internally. The two fires burned an area of 56 square kilometers and 94 square kilometers respectively, causing damage to over 16000 buildings and estimated direct economic losses exceeding 250 billion US dollars.

As of February 7th, there are still 105 wildfires in California that have not been completely extinguished, with a total burned area exceeding 163 square kilometers. At least 28 people have been confirmed dead, 16 are missing, and over 180000 have been urgently evacuated. During the peak period of the fire, nearly 420000 households in Los Angeles County experienced power outages, severe air pollution, and multiple school districts suspended classes.

JPMorgan estimates that the total losses from the fire are close to $50 billion, and insurance claims may exceed $20 billion, putting enormous pressure on long-term economic recovery.

Goldman Sachs believes that by 2025, US non farm employment will experience the largest adjustment in history, with a major overhaul of US immigration data and an expected significant increase of 2.3 million households in employment.

On February 7th of this year, the US Bureau of Labor Statistics released its January non farm payroll report, which will include an annual benchmark revision for household surveys. This benchmark revision will re anchor the number of non institutional residents surveyed to the newly released census forecast, leading to revisions in labor force, household employment, and other indicator levels.

It is worth mentioning that the non farm payroll report data comes from two sources - corporate surveys and household surveys. Institutional surveys are conducted by asking about the number of positions on a company's payroll, while household employment surveys inquire about the actual employment situation of households, covering a wider range of employment situations than corporate surveys.

For a long time, the number of newly employed people in enterprise surveys has been higher than that in household survey data. For this adjustment, Goldman Sachs pointed out that the past few years' censuses have significantly underestimated population growth, and its immigration estimates for 2023-2024 are based on lagged migration information from the 2022 American Community Survey (ACS), thus failing to capture recent immigration waves. This means that household surveys have also significantly underestimated employment growth, and last December's census adjusted its estimation method and raised the net immigration estimate for 2021-2024 by 3.5 million.