JOBS REPORT — What you need to know in markets on Friday

Myles Udland
Markets Reporter

The biggest economic event of the month is here — the November jobs report.

At 8:30 a.m. ET, the Bureau of Labor Statistics will release the November jobs report, which should show the economy added 195,000 nonfarm payrolls in the second-to-last month of 2017. The unemployment rate is expected to hold at 4.1%, according to estimates from Bloomberg.

Economists will also keep an eye on wage growth, which rose a disappointing 2.4% over last year in October.

In markets, bitcoin (BTC-USD) will likely remain the big story.

The major U.S. indexes closed higher on Thursday, but the several-thousand-dollar price swings we saw in the value of bitcoin during the day captivated markets and made trading elsewhere a sideshow.

As of around 5:00 p.m. ET, the price of bitcoin was sitting near $16,275 according to Yahoo Finance’s compiled pricing from 60 exchanges. Coinbase, the most popular exchange for buying and selling bitcoin, was quoting the digital currency at around $16,855. Near noon eastern on Thursday, Coinbase had bitcoin briefly trading north of $19,000.

Diane von Furstenberg, fundraising chair for the new Statue of Liberty Museum, celebrates with construction workers at the Topping Off ceremony for the new Statue of Liberty Museum, Monday, Dec. 4, 2017, on Liberty Island in New York. (Diane Bondareff/AP Images)

Wall Street’s jobs preview

The November jobs report should be more of the same, according to Wall Street — strong job growth, low unemployment, decent wage growth.

“We estimate that nonfarm payrolls increased 225,000 in November, above consensus of 195,000,” writes Spencer Hill, an economist at Goldman Sachs. Hill also sees wages rising 2.7% over last year and the unemployment rate holding at 4.1%.

In a note to clients ahead of the report, the team at Bespoke Investment Group highlights that the secondary indicators of employment in November have skewed negative. This looks at things like employment data points from regional Fed surveys, consumer confidence measures, private payrolls, and manufacturing reports.

“All in all, employment-related indicators showed decelerating trends in Novembers, but it is not as if that isn’t already priced into expectations,” Bespoke writes. In October, the economy added 261,000 jobs, 66,000 more than economists are forecasting were added in November.

History, however, would suggest a strong report could be coming on Friday morning, as five of the last eight November reports have topped expectations on the initial reading by a median of 15,000 jobs.

Over at Pantheon Macroeconomics, Ian Shepherdson forecasts that 180,000 jobs were added to the economy in November, writing that, “the biggest threat we can see to payroll growth over the next few months is the shortage of qualified staff.” Shepherdson adds that the firm’s composite index of the labor market points to job gains being closer to 300,000, though the availability of labor will constrain this.

Job growth can’t keep up with demand because quality labor has been hard to find in the economy. (Source: Pantheon Macroeconomics)

This report also comes just a few days before the next Federal Reserve meeting, which kicks off on Tuesday, December 12, with a December 13 policy announcement expected to see the central bank raise interest rates for the third time this year.

Wage growth, seen as a harbinger of inflation in the economy, has been lackluster given the extremely low unemployment rate, and economists will be on the lookout for any signs of an acceleration in a slow, but steady, trend higher for wages.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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