No one in Bloomberg’s survey expects December’s job gain figure to match November’s 266,000, a tally that partly reflected the return of thousands of striking General Motors Co. workers. In fact, JPMorgan Chase & Co. economist Daniel Silver cautions that last month’s figure could come in at a survey-low 125,000 due in part to calendar quirks, but payrolls would rebound in January.

Still, weaker-than-anticipated payrolls would have more impact in pressuring yields lower than a positive surprise would in the other direction, said Jim Caron, fixed-income portfolio manager at Morgan Stanley Investment Management Inc. “It’s harder to get higher and higher numbers now because we’re probably at full employment.”

Even with slower hiring, workers have seen stronger wage gains, particularly at the lower end. While overall pay growth has been muted compared to what may have been was expected at this point in the expansion, production and nonsupervisory employees have seen their average hourly pay rise at the fastest pace in more than a decade.

For investors, the wage number will be the key point in this report, said Tom Essaye, a former Merrill Lynch trader who founded the “Sevens Report” newsletter. Assuming annual pay gains hold around 3.1% and hiring is strong, stocks should rally: “The market will love it because that’s a Goldilocks outcome,” he said.

What Bloomberg’s Economists Say
“Payroll gains will likely normalize in December following the GM strike swing, which weighed on net hiring in October and inflated the November gain ... Bloomberg Economics projects December nonfarm payrolls at 205,000.”
—Carl Riccadonna, Yelena Shulyatyeva, Andrew Husby and Eliza Winger

This article was provided by Bloomberg News.

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