Strong hiring gains in December could represent a break in the darkening clouds over the U.S. economy. Here’s watch to watch in Friday’s employment report.

The U.S. likely added 182,000 new jobs in the final month of 2018, according to a MarketWatch survey of economists.

An increase of that size would top the 155,000 preliminary gain in November, but fall short of the 206,000 average through the first 11 months of the year.

There is a good chance of a stronger number, though. For one, bad weather kept more people at home in November. The weather was better in December and that could give a boost to employment.

A separate employment report by ADP, meanwhile, showed the biggest increase in hiring in almost two years. ADP, however, isn’t a great proxy for the government’s official employment figure, but it does offer a sense of what’s to come.

Low, low, low unemployment

The unemployment rate fell to a 49-year low of 3.7% in the fall and it could go even lower. Economists predict it will dip again to 3.6% at year-end.

Even if the economy slows, the jobless rate could continue to mark a fresh nadir. Creating as few as 100,000 in December might be enough to absorb all the new entrants in the labor force and then some, economists say. A result that could drive the unemployment rate a tick lower.

Read:Jobless claims climb to 231,000 at end of 2018 amid government shutdown

How come? The labor market is expanding slowly due to an aging population and tighter immigration restrictions. And most Americans who want a full-time job have already found one.



Worker pay

Low unemployment and a scarcity of skilled workers has forced companies to sweeten pay and benefits. Hourly pay for the average American worker has risen to a 12-month rate of 3.1% — the biggest increase in almost 10 years.

Rising pay is a double-edged sword. Though it means more money in the pockets of average workers, it also raises the specter of inflation, a factor—if seen heading sharply higher—that could compel the Federal Reserve to raise interest rates with more vigor. Thus far, the Fed has described inflation as ending 2018 “a bit more subdued,” according to Fed Chairman Jerome Powell, during his December news conference following the ninth interest -rate increase since the end of 2015. The central bank’s inflation projection remains near 2%.

The threat of fresh round of rate hikes in 2019 have contributed to worries for investors still swooning from a sharp downturn in the Dow Jones Industrial Average DJIA, -0.24% and the S&P 500 index SPX, -0.83% , which took hold in earnest back in October.

Read:Bad omen for economy? ISM survey posts biggest drop since Lehman crisis in 2008



Holiday-delivery jobs

One potential wild card in the employment report is growth in jobs tied to the delivery of holiday gifts and other goods.