The labor market is sizzling. Job openings are near a record high, unemployment is at a 17-year low and companies are adopting inventive ways to lure new workers amid a growing labor shortage.
Here’s what to watch in the U.S. employment report for November due on Friday morning.
Good times go on
The U.S. likely added 200,000 new jobs in November, economists polled by MarketWatch forecast. Hiring fell sharply September after a pair of major hurricanes, but that led to a strong rebound in October when the economy added 260,000 jobs.
Some of the carryover probably spilled into November. One piece of evidence: Small-business hiring plans hit an all-time high last month, the National Federation of Small Business said.
Watch the hard hats
Construction companies and manufacturers created very few jobs in September and October. The storms sidelined builders in the South, where home sales are strongest, and disrupted supply chains for manufacturers across the country.
Look for a snap back in November. Builders have to repair or replace lots of destroyed or damaged homes in Texas and Florida.
And manufacturers could have a reboot in hiring with supply lines restored and demand growing overseas for U.S. exports. The global economy hasn’t been this healthy in perhaps a decade.
What about wages?
Pay checks for most employees still aren’t rising very rapidly. Hourly wages rose 2.4% in the 12 months ended in October, little changed from three years ago.
Although firms have boosted pay for some, most are getting just enough extra dough each year to stay ahead of inflation.
Other indicators of worker pay, however, suggest wages are creeping higher again and some economists expect to see evidence in the November employment report. They predict a 0.3% advance in hour wages that would push the 12-month rate up to 2.7%.
Breaking below the 4% barrier
The U.S. unemployment rate has plunged to a 17-year low of 4.1% and any month now it could dip below 4% for the first time since the end of 2000.
Economists don’t think it will happen this month, but don’t be surprised. Job openings are plentiful and with the holidays approaching many Americans could take-part time jobs to earn extra cash.
If the jobless rate falls below 4%, however, it increases the odds of the Federal Reserve raising interest rates more aggressively in 2018. That means a higher cost of borrowing.