The Labor Department will release initial hiring and unemployment figures for December at 8:30 a.m. Eastern time. Here’s what to watch for:
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The unemployment rate is expected to be unchanged at 3.5 percent.
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Average hourly earnings are predicted to rise by 0.3 percent, after moving up 0.2 percent in November. That would bring the year-over-year increase to 3 percent.
The report will provide a clearer reading of the economy.
Analysts are paying particularly close attention to Friday’s release, and not just because it will begin to close the books on 2019.
Figures from the previous two months were clouded somewhat by a six-week strike by 49,000 General Motors workers. And although the report won’t alter last year’s overall employment picture, December’s reading will help explain whether November’s unusually exuberant gains were a one-off or the start of a trend.
“The big story of 2019 was the slowdown from 2018” in payroll growth, said Nick Bunker, an economist at the jobs site Indeed. “I just want to see whether we’re going to head into 2020 with a bit more momentum.”
Keep an eye on what the report says about manufacturing.
The government reported this week that the number of new people filing for unemployment benefits dipped, a figure that remains at historically low levels. Nonetheless, Andy Challenger, vice president of Challenger, Gray & Christmas, an outplacement firm that tracks layoff announcements, said that “overall the job cuts we saw in 2019 were fairly high, higher than you would expect.”
Industrial goods and automobile manufacturers were among the hardest hit.
A weakening manufacturing sector was a persistent concern throughout last year. “Uncertainty around trade has been a serious complication,” Mr. Challenger said. “It’s hard for these manufacturers to make decisions around long-term planning when they don’t know what their cost structure is going to be. And there’s still changes to come.”
There has been progress on the trade front — the United States and China have reached the first phase of an agreement that officials are scheduled to sign next week. But two-thirds of Chinese imports worth $360 billion are still subject to tariffs. And President Trump has said he will impose more tariffs, on imports from Europe, this month.
“It will be interesting to see how manufacturing ended the year,” a sector that is particularly important to President Trump and his voter base, said Rubeela Farooqi, chief United States economist for High Frequency Economics. “Especially in an election year, the trajectory is going to be important.”
Wage growth has been disappointing.
The labor squeeze has helped workers at the lowest end of the pay scale, pushing wage increases above the overall average. Nonetheless, spiritless wage growth has been one of the more disappointing story lines of 2019.
“We saw an acceleration of wage growth in 2018, but then it stalled out in 2019,” Mr. Bunker of Indeed said. “Average wage growth was fairly tepid.”
Average year-over-year raises in 2019 have so far failed to match the 3.4 percent peak reached in February.
The slowdown is puzzling considering that the jobless rate has been below 4 percent for nearly two years. Employers routinely lament their inability to find workers at the wages they are offering. Finding qualified workers was the top complaint for small-business owners in December, according to a monthly survey from the National Federation of Independent Business.
Robert Herman owns a mobile pet grooming franchise in Charleston, S.C., where the jobless rate was 1.8 percent in November. This year Mr. Herman said he planned to add a fifth van to his fleet of moving dog and cat salons and hire two more employees. Between commission and tips, he said his workers average $20 to $25 an hour.
The low overall unemployment rate may be overstating the strength of the labor market, said Elise Gould, an economist at the left-leaning Economic Policy Institute, pointing to slow wage growth.
This year, minimum wage increases could help to further pull up paychecks at the bottom. Raises either went into effect this month or are scheduled for later in the year in 21 states and 26 cities and counties.