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The markets are going to get their last employment situation report for 2017 on Friday, January 5, 2018. The Bureau of Labor Statistics has shown large gains in payrolls over the course of 2017, and the official unemployment rate is now so low that it feels like a time when the employment base will have to expand to keep generating more job fillings.

According to both Bloomberg and the Wall Street Journal, unemployment is expected to remain flat at 4.1%.

There are many metrics inside the unemployment report which get viewed. The payrolls gain is actually more closely watched than the official unemployment rate, and then there is hourly earnings as a measurement of wage inflation.

Bloomberg has estimates of 190,000 in nonfarm payrolls, versus 228,000 in November’s preliminary report. Bloomberg’s private sector payrolls report is forecast to drop to 183,000 in December from the 221,000 preliminary report in November. The Wall Street Journal’s forecast for nonfarm payrolls is 180,000.

Hourly earnings are expected to be up 0.3% in December according to both Bloomberg and Wall Street Journal consensus estimates. While the 0.2% gain in November sounded weak, the reality is that this was a 2.5% gain over the prior year. The average workweek was 34.5 hours in November and is expected to be flat in December’s reading.

The market also likely will begin to focus on the labor force participation rate. After all, this is the pool of adults that can expand the employment base. That participation rate was 62.7% in November.

It is going to be interesting to see how 2018 unfolds for the employment picture. There are more openings than what employers feel are qualified candidates that they can hire for what they are willing to pay. The Federal Reserve also wants inflation to be in a 2.0% to 2.5% range to justify more interest rate hikes, and that’s where we are on annualized wage inflation.

Stay tuned.