5 Things to Watch in the November Jobs Report

Economists surveyed by The Wall Street Journal estimate payroll growth of 205,000 and the unemployment rate holding steady at 5%. Here are five things to watch in the report.

1. Sustained Rebound

After two months of lackluster job gains, the October jobs report offered the healthiest number so far this year: 271,000 jobs, which helped boost the monthly average to 206,000. Economists don’t think employers kept up that pace last month, though hiring data released Wednesday by payroll processor ADP suggests the number could be better than expected. Even if payrolls disappoint, they would have to be pretty terrible to dissuade Fed officials from a rate increase.

2. Waxing Wages

Hourly compensation for the nonfarm business sector grew 3.4% in the third quarter from a year earlier, the second-biggest increase since the third quarter of 2009. And last month’s jobs report showed a 2.5% pickup in average hourly earnings compared with October 2014. Fed chief Janet Yellen said Wednesday it was too soon to say if recent evidence of firming wages foretell a long-awaited sustained pickup. Friday’s report will offer more clues.

3. Unemployment Rate

The headline unemployment rate has fallen sharply from a 10% peak during the recession to 5% in October. A dip this month could push the rate below 5% for the first time since before the recession. At 4.9%, the figure would also be in line with where Fed officials expect the unemployment rate to stand in the long run.

4. Hidden Slack

Still, many Fed officials believe the headline unemployment number may be underestimating slack in the labor market. A big reason the number fell so swiftly in recent years was that people gave up on their job searches. The share of people working or actively looking for work held steady in October at 62.4%, near a 40-year low. As the labor market tightens, more workers could come off the sidelines.

5. Industry Breakdown

Industry jobs figures will offer clues on how different sectors are responding to lower oil prices, weak demand overseas and a stronger dollar. Cheap oil continues to weigh heavily on the mining industry, which lost 5,000 jobs in October and has shed 109,000 jobs since peaking in December 2014. Meanwhile, low oil prices have benefited other sectors, including manufacturing and construction.

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