Friday's December Jobs Report Will Answer Two Big Questions

Investors Business Daily ^ | December 5, 2017 10:38 AM ET | JED GRAHAM

[expat_panama]

The employment report out on Friday at 8:30 a.m. ET is expected to show that the economy added 175,000 jobs in December, continuing the solid trend of recent months.

But the real focus will be on wage growth and the jobless rate, which both delivered big surprises in last month's report.

After the rise in average hourly earnings hit a seven-year high of 2.8% in October, wages backslid in November, slipping 0.1% and bringing the annual rate down to 2.5%. Friday's report could indicate whether that was just a statistical quirk.

The consensus view is that December's report will show a 0.3% rise in average hourly earnings from November. Jefferies economists Ward McCarthy and Thomas Simons expect a 0.4% jump, lifting annual wage gains to a new cycle high of 2.9%.

In November, the jobless rate surprisingly fell to a nine-year low of 4.6% from 4.9%...

...Can the job market accommodate President-elect Donald Trump's fiscal fuel without overheating? That won't be clear for some time... ...how fast the Federal Reserve will raise interest rates in the coming year.

IBD'S TAKE: The Federal Reserve, long worried about paltry growth, has shifted to the role of traffic cop. Now the key question is whether Donald Trump's fiscal fuel will raise the economy's speed limit, allowing for faster growth without pushing inflation much above the Fed's comfort zone.

On Thursday, ADP reported that private employers added 153,000 jobs in December, somewhat less than expected. The ADP has an uneven record of predicting Labor's nonfarm payrolls. Meanwhile, initial jobless claims tumbled by 28,000 to 235,000 in the week ended Dec. 260,000.

Incoming evidence from corporate earnings reports suggests that wage pressures are continuing to rise moderately...

[Doogle]

...answer three actually...3) will the msm tell the truth?

[Paul R.]

175,000 jobs added is supposed to be good? It is pathetic!

[9YearLurker]

Strap in—we’re still early in the Trump bump rise.

[Zenjitsuman]

Using the current UE calculation Trump would see a rise in UE as people came back into an improved labor market.

Trump should say that UE numbers are BS and use the more astute and genuine U6 figure which UE is 9.3%.

U6 will go down only as REAL UE including LONG TERM UE is addressed.

Pressure on wages is being artificially stoked by the minimum wage $15 laws. These laws are all politics, they are causing job losses, and hastening robotics replacing workers.

[shelterguy]

The jobs report is a joke. Most of the jobs “added” are part time minimum wage. I believe we need 200,000 full time jobs per month just to keep up with population growth.

The unemployment rate is a farce. It has nothing to do with how any are unemployed. It only says what percentage are collecting unemployment checks.

[RipSawyer]

Good grief, as Charlie Brown used to say. They are talking as if our main problem is the prospect of an “overheated” economy. Meanwhile two days ago on TV it was reported that something like seventy one percent of American families don’t have even one thousand dollars in savings and forty seven percent could not meet a four hundred dollar emergency without borrowing money. Yeah, our problem is that things are just too good, really, Obama explained it all.

[expat_panama]

The top 'o the Friday morning to all!   Stocks @ yesterday's close: mixed after 'positive reversal' (explanation here at IBD).  Translation: Nasdaq jumped up (distribution day count down now to 'just' 7) in lower volume but the S&P sagged.   My take, we're at the top of the recent trading range and this is when they like to sell.  We may also be at the top of the metals range too and those prices are flattening.  Futures for stock off -0.06% and for metals off -0.16%.

Here're all the econ #'s today:

8:30 AM Nonfarm Payrolls
8:30 AM Nonfarm Private Payrolls
8:30 AM Unemployment Rate
8:30 AM Hourly Earnings
8:30 AM Average Workweek
8:30 AM Trade Balance
10:00 AM Factory Orders

--and we got lots of FR econ threads again:

• Economics and finance The manufacturing jobs delusion
• Can Trump Fulfill The Tax-Reform Promise?
• Another ObamaCare Promise Bites The Dust
• Opinion: Donald Trump is at the center of any stock market prediction for 2017
• Inside How Trump Won the White Working Class
• Here’s Why Stanley Black & Decker Is Building a New U.S. Plant.(Bringing Craftsman tools back)
• Tough challenge for Trump: Getting more men back to work

[expat_panama]

My problem is I prefer to wait til we hit new highs so I can see for sure we got a decisive move, but lately this has been followed by a sell off w/ more highs later.

OK, so it means while others double their money in 3 months I have to wait 6 months.

[Freee-dame]

The unemployment rate is a farce. It has nothing to do with how any are unemployed. It only says what percentage are collecting unemployment checks.

I have always suspected that this is what the unemployment rate really meant but have never been able to find it written explicitly in a government document. It would be so much more honest to call that number "the percent collecting unemployment insurance payments" or an acronym meaning that. Of course the government prefers to say that people who have run through all of their unemployment benefits are no longer looking for work. This may be true if they have gotten on disability payments or found another person to support them or retired, but not if they still have to support themselves.

[Monty22002]

” It only says what percentage are collecting unemployment checks.”

WRONG.

It’s a simple phone survey. Are you employed. If not, are you looking for a job. If don’t have a job but are looking you count.

It has nothing to do with unemployment collections. Never, EVER.

[TalBlack]

Since when is 175000 “solid”? Isn’t the mere REPLACEMENT rate 200 something thousand?

[Monty22002]

It has nothing to do with unemployment checks or disability. It’s a phone survey asking are you working? If not, are you looking for a job. Period!! I HATE how people always after 5 years on here correcting them that there’s no connection between the unemployment rate and who gets benefits.

[Senator_Blutarski]

In November, the jobless rate surprisingly fell to a nine-year low of 4.6% from 4.9%...

No surprise here. They are preparing the data to make Trump look bad. The headline will read: "Trump jobless rate soars above Obama's 4.6%"

[shelterguy]

My wife works in the unemployment office. Even the people there laugh at the fake but accurate numbers.

[mewzilla]

Last figure I saw for replacement was over 250,000. And that was a while ago.

[Monty22002]

Tell her that the only thing that matters are phone surveys which ask basically are you looking for a job. Benefits or anything else do NOT factor.

[spintreebob]

Since 1970 high paying manufacturing job decline has been the story.

Retail jobs of low wages (Sears, KMart, Macys, Kohls, most malls) is now the story.

How many jobs does Amazon create?

How many jobs will IOT-Internet Of Things (Softbank) create?

[bert]

The Obama people will report an unadjusted rise of 1.% that will be adjusted down to 0% in March

[wrench]

These are not real jobs. Over 90% are part time jobs, with no benefits, and no future. Impossible to live on the annual wages these jobs provide. Essentially beer money, nothing more.