To say the October payrolls report will be closely watchedacross the world would be an understatement. It'll bemonumental.

After Friday's release, Federal Reserve policy makers will haveonly one more jobs report in hand—the November data—before theirfinal meeting of the year on Dec. 15-16. That's when they maydecide on the first interest-rate hike in almost a decade. Acouple soft payrolls performances could prompt the Fed to keep therate near zero, where it's been since 2008.

“Their case for whether or not to go in December could be madeor lost with the October employment report,” said Ryan Sweet, asenior economist at Moody's Analytics Inc.

America's jobs engine sputtered in August and September amidfinancial-market turmoil and concern that a hard landing in Chinacould spill over into emerging economies. The key questionis: Was that weakness in hiring temporary, or the start of adownshift? Last month's report may hold the answer.

Here's what to look for when the Labor Department's figures arereleased tomorrow at 8:30 a.m. in Washington:

Payrolls. Employers probablyadded about 180,000 workers in October, according to themedian forecast in a Bloomberg survey of economists. WithSeptember's 142,000 gain and August's 136,000 increase, the averagefor those two months was only 139,000. In the first half of thisyear, the average was 213,000. It was 260,000 for all of 2014,which was the best year for hiring since 1999.

So revisions matter, more than ever, and many economists expectto find better readings on the prior two months.

“The book is far from closed on the last few months,”' saidConrad DeQuadros, senior economist at RDQ Economics. “It's notclear that the labor market actually did slow down.”

One of the Fed's preconditions for raising rates is “somefurther improvement” in the labor market. Fed officials said inOctober that they'd consider a rate increase at their nextgathering, and Fed Chair Janet Yellen this week reinforced the viewby saying December was a “live possibility.”

Unemployment rate. The medianforecast in the Bloomberg survey calls for the unemployment rate tofall to 5 percent, the lowest since April 2008. It's inching closerto the 4.9 percent rate that Fed officials consider consistent withfull employment, or the level below which inflation pressures startto build.

The unemployment rate may be understating how much slack remainsin the labor market. Yellen has said she watches measures such aspart-time workers who would prefer full-time jobs, as well as theparticipation rate, which shows the share of working-age people inthe labor force.

“The unemployment rate continues to drift lower,” said Sweet,who reckons monthly payroll gains of about 100,000 may be enough toabsorb new entrants into the labor force and keep the jobless ratesteady. “If other measures of labor-market underutilizationcontinue to improve, then I think the Fed's going to feelcomfortable on the job-market front.”

Wages. With all eyes on theOctober payrolls number and prior months' revisions, wages maygarner a tad less attention this time, although they'll certainlybe monitored. Job-market watchers have been frustrated as asignificant pickup in worker pay has been elusive.

Average hourly earnings have been stuck in a narrow rangearound 2 percent since the expansion began in June 2009. TheBloomberg survey median forecast calls for a 2.3 percent advance inthe 12 months ended in October, which would be the strongestreading since May, after three months of 2.2 percentgains.

“Wages are a bit on the back burner for now,” said Sam Bullard,senior economist at Wells Fargo Securities LLC. Even with theprojected increase for last month, “it's not dramatically differentfrom the trend. Wages are still pretty tame.”

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.