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 A Reuters survey of economists forecast nonfarm payrolls rising
200,000, adding to the 271,000 jobs created in October.
The unemployment rate is expected to hold at a 7-1/2-year low of 5
percent. It is in a range many Fed officials see as consistent with
full employment and has dropped seven-tenths of a percentage point
this year.
"The employment report will give the Fed confidence to begin raising
rates in December. It will have to be a disaster for the Fed to
delay until 2016," said Ryan Sweet, senior economist at Moody's
Analytics in Westchester, Pennsylvania.
The Labor Department's closely watched jobs report will be released
on Friday at 8:30 a.m. (1330 GMT).
Fed Chair Janet Yellen struck an upbeat note on the economy when she
testified before lawmakers on Thursday, describing how it had
largely met the criteria the U.S. central bank has set for the Fed's
first rate hike since June 2006.
Yellen said the economy needs to create just under 100,000 jobs a
month to keep up with growth in the working age population. The
Fed's policy-setting committee will meet on Dec. 15-16.
"We believe the hurdle for dissuading the Fed from action at this
time is extremely high," said Michelle Girard, chief economist at
RBS in Stamford, Connecticut.
DIMINISHING SLACK
Another month of strong job gains would allay fears the economy had
hit a soft patch, after reports showing tepid consumer spending in
October and a slowdown in services industry growth in November.
Manufacturing contracted in November for the first time in three
years.
Though wage growth likely slowed last month, economists say that
would mostly be payback for October's outsized gains, which were
driven by a calendar quirk. Anecdotal evidence, as well as data on
labor-related costs, suggest that tightening job market conditions
are starting to put upward pressure on wages.
Average hourly earnings are forecast rising 0.2 percent after
increasing 0.4 percent in October. That would lower the year-on-year
reading to 2.3 percent from 2.5 percent.
"Wage growth finally appears to be firming after showing few signs
of progress even as slack declined quickly," said David Mericle, an
economist at Goldman Sachs in New York.
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Other labor market measures that Fed officials are eyeing as they
consider lifting the benchmark overnight interest rate from near
zero are expected to have held steady last month.
But the labor force participation rate, or the share of working-age
Americans who are employed or at least looking for a job, likely
rose from a near 38-year low of 62.4 percent.
Employment gains in November were likely broad-based, though
manufacturing and mining probably lost more jobs.
Manufacturing has been crippled by a strong dollar, efforts by
businesses to reduce bloated inventory and spending cuts by energy
companies scaling back well drilling and exploration in response to
sharply lower oil prices.
Mining employment has already declined by 109,000 since reaching a
peak in December 2014.
Oilfield services provider Schlumberger <SLB.N> this week announced
another round of job cuts in addition to 20,000 layoffs already
reported this year. The company said it expected the slowdown in
drilling activity to continue in 2016.
Further gains are expected in construction payrolls. The services
sector will likely account for the bulk of the increase in
employment, but retail and courier payrolls are a wild card as
company are now starting their holiday hiring a bit earlier than in
prior years.
(Reporting by Lucia Mutikani; Editing by James Dalgleish)
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