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A Preview Of Friday's Jobs Data

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A Preview Of Friday's Jobs Data
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The customary Friday jobs report is close. The typical nervous anticipation ahead of the data is slowly giving way to a complacency, given the consistent robustness revealed by the data in the expansionary phase of the current economic cycle.

The report due to be released by the Labor Department is scheduled for 8:30 a.m. ET Friday.

Robustness Relayed By Past Data

The average jobs gain, calculated using the seasonally adjusted data from the Establishment survey, show a fairly decent clip of 196,500 for the past 12 months. This is despite a measly gain of 24,000 in May this year, with a strike by Verizon Communications Inc. (NYSE: VZ) employees offered as a plausible reason for the anemic showing. If the May numbers are taken out of the equation, the average gains go up to 212,000.

The jobless rate has been holding low at 4.9 percent.

Expectations For November

Economists, on average, expect the economy to add 170,000 jobs in November, up from the 161,000 added in October. About 155,000 of these are expected to come from the private sector and the remaining accounted for by the government. The jobless rate is expected to remain stay put at 4.9 percent.

The average hourly earnings, which is an inflation measure, is expected to tick up by 0.2 percent month-over-month following a decent 0.4 percent gain in October.

The ADP survey, which is considered a precursor of the Labor Department's non-farm payrolls report, released on Wednesday showed that the private sector added 216,000 jobs in November, well ahead of the 160,000 job gains expected by economists and the downwardly revised jobs gains of 119,000 for October.

The data along with a rally in the energy space in response to OPEC's production cut led to a sharp spike at the open on Wednesday, although the markets retraced their gains over the course of the session before ending mixed.

Why Friday's Numbers Are Important

This is the last piece of economic evidence of importance the Federal Reserve's monetary policy setting arm, the FOMC, will be poring over when they meet for the last time this year on December 13 and 14. Given the central bank's obsession with the labor market strength, the numbers would definitely matter for the Fed and in turn the investors, who are hoping that the Trump-induced rally will play out until the end of the year.

At the time of writing, the SPDR S&P 500 ETF Trust (NYSE: SPY) was up 0.10 percent at 220.59.

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