Jobs report preview: Did solid hiring draw in more workers?

WASHINGTON (AP) — Inflation is surging. Supply chains are snarled. And yet economists predict that America's employers delivered another month of solid job growth in November on the strength of steady consumer spending.

Beneath the headline figures on hiring and unemployment, though, lurks a potentially even more consequential question: Are more people who lost jobs to the pandemic recession finally coming off the sidelines to look for work again? Many more job-seekers are needed to help companies fill their open jobs and sustain the economy's growth.

It's also a critical question for the Federal Reserve. If the proportion of people who either have a job or are looking for one doesn't rise much, it would suggest that the Fed is nearing its goal of maximum employment.

With inflation at a three-decade high and far above the Fed's 2% annual target, reaching its employment mandate would heighten pressure on Chair Jerome Powell to raise interest rates sooner rather than later. Doing so would make loans more expensive for many individuals and businesses.

Economists have forecast that employers added 535,000 jobs in November, nearly the same as October's 531,000 gain, according to data provider FactSet, and that the unemployment rate dipped from 4.6% to 4.5%. The Labor Department will issue the jobs report at 8:30 a.m. Eastern time Friday.

Even as the jobless rate has declined this year, the proportion of Americans who are working or looking for work has barely budged. A shortage of job-seekers tends to limit hiring and force companies to pay more to attract and keep employees. Higher pay can help sustain spending and growth. But it can also feed inflation if businesses raise prices to offset their higher labor costs, which they often do.

One result is that there are now...