Economists expect the report out at 8:30 a.m. ET will show nonfarm payrolls rose by 184,000 jobs last month, according to economists surveyed by Bloomberg.
Depending on how long it lasts, the shutdown "could be a big negative" in next month's jobsreport, which will reflect January employment, Kevin Hassett, a top economic adviser to President Trump, said Thursday.
In a signal of even more strength, 58,000 more jobs overall were added in the prior two months than previously reported.
Paychecks grew as employers raised wages to attract new workers.
The unemployment rate rose from 3.7 percent to 3.9 percent because more people were looking for jobs in December. Median estimates from the Bloomberg polling suggest the USA added 184 thousand jobs for December, an improvement over November's 155 thousand addition, but still below the year's average of 206 thousand.
"There is no preset path for policy and particularly with the muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves", Powell said at the American Economic Association's annual meeting in Atlanta. The dollar .DXY surrendered earlier gains against a basket of currencies and U.S. Treasury yields rose.
The unemployment rate is seen holding steady at 3.7%, its lowest level since 1969 during the Vietnam draft.
A third report from the Labor Department showed initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 231,000 for the week ended December 29. The central bank last month forecast two rate hikes this year and signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.
"Markets will probably be miserable no matter what the outcome", said Dan North, chief economist at Euler Hermes North America in Baltimore. Last week included Christmas and preceded New Year's Day.
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The Labor Department has not been affected by the partial shutdown of the United States government and will continue to publish economic data complied by its statistics agency, the Bureau of Labor Statistics.
Even with fear of a global economic slump depressing stock markets, Friday's jobs report for December is expected to offer reassurance that the US economy remains sturdy and on track to expand for a 10th straight year.
Data releases from Census Bureau and Bureau of Economic Analysis have been suspended during the shutdown, which started on December 22 amid demands by Trump for $5 billion in funding for a wall on the U.S. -Mexico border. The median forecast of economists surveyed by Refinitiv was for 177,000 new jobs.
Growth forecasts for the fourth quarter are around a 2.6% annualized rate, with risks tilted to the downside amid fading stimulus from the Trump administration's US$1.5 trillion tax cut package, a trade war with China and policy uncertainty in Washington. The latest monthly jobs shows that the economic weakness causing stock markets to drop isn't yet visible in the employment figures. For all of 2018, construction jobs were up 280,000.
More broadly, the USA labor market is extraordinarily tight, leaving businesses reluctant to let workers go.
The big unknown is the partial federal government shutdown.
The increase in hiring largely occurred in health care, hospitality and leisure, construction, manufacturing, and retail. Retailers hired 23,800 more workers. For the year, those jobs have increased by 241,000.
Barclays - 185,000 jobs, 3.6 percent unemployment, 3 percent annual wage gain. The health and education sector added 82,000 positions.