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 A Reuters survey forecast nonfarm payrolls increasing 180,000, well
above the 139,000 jobs per month average for August and September.
Should payroll gains meet expectations, it would add to robust
automobile sales in painting an upbeat picture of the economy at the
start of the fourth quarter.
With speeches from several Fed officials, including Chair Janet
Yellen, suggesting a low bar for a December rate increase,
economists say job gains above 150,000 in October and November would
be sufficient for the central bank to lift benchmark overnight
borrowing costs from near zero.
Minutes from the Fed's Oct. 27-28 meeting and subsequent comments
from Yellen have firmly put a rate hike on the table at the central
bank's upcoming Dec. 15-16 gathering.
"It's not great job growth but it's respectable and will qualify as
good enough for the Fed to feel comfortable to raise rates," said
David Donabedian, chief investment officer at Atlantic Trust Private
Wealth Management in Washington.
The Labor Department's closely watched jobs report will be released
on Friday at 8:30 a.m.
It will likely join October's strong services sector and auto sales
data in supporting views that economic growth will regain momentum
in the fourth quarter after braking sharply to a 1.5 percent annual
pace the July-September period.
Wages, which have been almost stagnant despite a tightening labor
market, are forecast rising 0.2 percent in October after holding
steady in September. Even with the expected gain, the year-on-year
reading would bump up to only 2.3 percent, a still-tepid pace that
threatens little inflation pressure.
The unemployment rate is expected to have held steady at a more than
seven-year low of 5.1 percent, just a touch above the level many Fed
officials see as consistent with full employment.
REVISIONS EYED
Economists also expect payroll gains for August and September will
be revised higher as the sharp slowdown evidenced in prior reports
was not supported by other labor market indicators, such as weekly
claims for jobless benefits, which are near 42-year lows.
"The report will continue this pattern of an economy which is
growing at a steady pace, but clearly with a labor market that is
tightening," said David Kelly, chief global strategist at JPMorgan
Asset Management in New York.
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Economists anticipate some improvement in other labor market
measures that Fed officials are eyeing as they contemplate raising
rates for the first time since 2006.
But the labor force participation rate, or the share of working-age
Americans who are employed or at least looking for a job, likely
held at a near 38-year low of 62.4 percent.
Employment gains in October were likely broad-based, though
manufacturing and mining probably lost more jobs.
Manufacturing has been hit by a strong dollar, efforts by businesses
to reduce bloated inventory and spending cuts by energy companies
cutting back on well drilling and exploration in response to lower
oil prices.
Mining employment has already declined by 102,000 since reaching a
peak in December 2014. Oilfield services provider Schlumberger <SLB.N>
last month announced further layoffs in addition to the 20,000 jobs
it has already eliminated.
Construction payrolls, however, are expected to have increased
further, although the gains likely remained modest.
Strong job gains are expected in the services sector, especially in
retail, health and leisure. Government payrolls are expected to have
increased by 15,000 last month.
(Reporting by Lucia Mutikani; Editing by Tim Ahmann and Meredith
Mazzilli)
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