- The economy is expected to have added 180,000 or more jobs in November, but the real trend of job growth is more like 150,000.
- The pace of job growth has slowed this year, and in fact for the year-to-date through October, it's the slowest pace since the early days of the recovery in 2010.
- Job growth is still strong enough, however, and the slower pace should have no impact on the Fed's decision, unless it falls more.
- Economists said the slower growth is due to a lack of workers and the trade war.
Job growth should appear strong in November as striking GM workers returned to the workforce.
Economists surveyed by Dow Jones expected 187,000 jobs were added in November, and Refinitiv's consensus forecast was 180,000. Wages are expected to rise by 0.3% in the month, and unemployment is expected to remain at 3.6%. The government's monthly employment report is released at 8:30 a.m. ET Friday.
"I think we'll see 215,000 payrolls," said Ward McCarthy, chief financial economist at Jefferies. "I think the big feature will be the reversal of the negative affect of the GM strike. I think we'll see manufacturing payrolls up by about 50,000."
The economy added 128,000 jobs in October, including the negative impact of the General Motors strike, which reduced vehicle and parts manufacturing jobs by 42,000.
But even if November nonfarm payrolls hit the 200,000 expected by some economists, the trend of job growth has downshifted to something more like 150,000 when excluding the GM effect. For the year so far, monthly job growth has averaged 167,000, compared to 2018's pace of 233,000.
According to government data, the economy has added 1.67 million jobs for the year, as of October, and that's the slowest growth since 2010, when just 838,000 payrolls were added through October.
The most sluggish pace in the last five years was 2017, when 1.76 million jobs were added through October. Last year, 2.26 million were added.McCarthy said the sluggishness this year has a lot to do with a lack of available workers, but also some impact from the trade war.
"The labor market reflects the economy but also reflects the number of heads around that you can hire. The economy is not a problem for the labor market now. The problem is there's not enough people. There are shortages in food services, construction."
McCarthy said trade has also impacted hiring. "It's been a factor in manufacturing, and any trade dependent service jobs have probably struggled as well," he said. "That's a pretty small piece of the economy."
ADP's payrolls reported this week showed just 67,000 jobs added in November, a surprising decline. The surprise weakness in the ADP number was due in part to a loss of 18,000 goods-producing jobs that were from natural resources, mining, construction and manufacturing.
Trade, transportation and utilities, usually a robust sector, declined by 15,000, and information services fell by 8,000. Small business was also hit, with a decline of 15,000 workers in businesses with fewer than 20 employees.
Joseph Song, senior economist at Bank of America Merrill Lynch, said he expects 195,000 jobs in the government report, and without GM workers, the number would be closer to trend at 150,000.
Economists say 150,000 is still a decent level of growth, and the economy needs about 100,000 jobs to grow.
"We're expecting the job market to stay on this steady trajectory," Song said. "That said the ADP number we got a few days ago suggests there could be some downside risk. It wasn't just manufacturing. It was trade and transportation...That would be because businesses are not buying as many Chinese goods, so the need for truckers and shippers are declining."
Economists do not expect the report, or even a slower pace of job growth to impact the Fed, which meets next week.
"Barring something that's teeth rattling, it's really not going to have an effect on monetary policy," McCarthy said.
CNBC's Juan Aruego contributed to this report.