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 Nonfarm payrolls probably increased 234,000 last month after
advancing by 252,000 in December, according to a Reuters survey of
economists. It would be the 12th straight month of job gains above
200,000, the longest streak since 1994.
"That would be seen as encouraging given everything that is going on
in the rest of the world and would reinforce the notion that
consumer spending will remain a key pillar of support for the U.S.
economy," said Millan Mulraine, deputy chief economist at TD
Securities in New York.
The unemployment rate is forecast steady at a 6-1/2 year low of 5.6
percent.
The Labor Department will release its closely watched employment
report at 8:30 a.m. (1330 GMT) on Friday, a week after the Federal
Reserve ramped up its assessment of the jobs market and the overall
economy.
Sputtering growth in Asia and Europe, along with a strong dollar,
appears to have taken some steam off the U.S. economy in the fourth
quarter.
In addition, a drop in crude oil prices in recent months have led
some energy companies to cut back or delay capital expenditures,
further hampering growth. Oil prices have fallen about 60 percent
since June amid a glut caused by increased production in the United
States and weak global demand.
There are signs some of this softness persisted into the new year,
with most manufacturing sentiment surveys weakening in January.
While cheap oil has prompted some energy firms to layoff workers,
economists see those job cuts as little more than a drop in the
bucket given the size of the U.S. economy.
"As of December, oil and gas extraction employment was just 0.18
percent of total private employment, so any disruptions here should
not have a major impact on overall payroll growth," said Lewis
Alexander, chief economist at Nomura in New York.
Instead, the lower oil prices are seen as a massive tailwind for
consumer spending, which is also expected to get a boost from a pick
up in wages as the jobs market continues to tighten.
In January, average hourly earnings are expected to increase 0.3
percent, more than reversing December's surprise 0.2 percent fall,
which was the sharpest drop since at least 2006.
While several states put in place higher minimum wages last month,
economists said the impact would be minimal.
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According to Michelle Girard, chief economist at RBS, roughly three
million workers may have been affected, which would account for just
3 percent of the private sector's 118.4 million employees.
Wage gains are seen as the key factor that will determine when the
Federal Reserve will starting raising interest rates.
"Despite stronger employment momentum, slow wage growth and
inflation mean there is no rush to tighten (monetary) policy. The
Fed may wait until September," said Thomas Costerg, a U.S. economist
at Standard Chartered Bank in New York.
With January's report, the government will revise payroll
employment, hours and earnings figures dating back to 2010. The
government has said the level of employment in March 2014 is likely
to be about 7,000 higher than previously estimated.
It will also adopt a new population estimate that it will use to
adjust the figures from its household survey. That survey is used to
determine the number of unemployed and the size of the workforce.
In January, private payrolls are forecast rising 225,000. More job
gains are seen in manufacturing, but cold weather may have curbed
construction payrolls after a hefty increase in December.
Retail employment will be watched to see if a sharp December
slowdown persisted. Government payrolls are forecast rising 9,000,
but are seen as a wild card since they tend to fall in January.
(Reporting by Lucia Mutikani; Editing by Diane Craft)
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