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2017-01-06 10:32:19
Jobs Report: What to Watch For

The Labor Department is set to release jobs data for the final month of 2016 at 8:30 a.m. on Friday. The announcement will be the final jobs report of the Obama presidency and the first since the Federal Reserve Board raised interest rates last month, for only the second time in a decade.

This is what you should watch for:

Economists estimate that the United States added 175,000 jobs in December, just a bit below the average for the first 11 months of the year, but a surprise either way is possible. New weekly unemployment claims inched higher in December, which could portend weakness. On the other hand, consumer sentiment has been very strong, and the stock market has been surging — factors suggesting that the economy has plenty of underlying strength.

Unemployment plunged in November to 4.6 percent from 4.9 percent the month prior. Given that drop, economists think a slight uptick is possible for December, especially if more people start to seek work again, returning to the labor force.

In three words: average hourly earnings. Wages have been the missing link for most of the recovery, although pay has finally begun to rise for many workers. Economists are looking for average hourly earnings to rise by 0.3 of a percentage point in December, bringing the year-over-year increase to 2.8 percent.

If the gain is higher than that, it would be the biggest yearly jump in wages since the recession ended in 2009.