U.S. job growth likely rebounded sharply in October after hurricane-related disruptions depressed employment in September, in a move that could seal the case for an interest rate increase from the Federal Reserve in December even as wage growth probably slowed.
According to a Reuters survey of economists, the Labor Department’s closely watched employment report on Friday will likely show that nonfarm payrolls increased by 310,000 jobs last month. That would be the largest gain since October 2015.
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Economists, however, remain optimistic that wage growth will accelerate with the labor market near full employment. The unemployment rate is forecast to hold steady at a more than 16-1/2-year low of 4.2 percent. The jobless rate is slightly below the Fed’s median forecast for 2017.
For now, tepid wage growth would bolster views that inflation will continue to undershoot its 2 percent target and raise concerns about consumer spending, which appears to have been largely supported by savings.
The economy grew at a 3.0 percent annualized rate in the third quarter. Economic strength has persisted even as President Donald Trump and the Republican-led U.S. Congress have struggled to enact their economic program.
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