US jobs showed surprisingly robust growth in October. The release of the Automatic Data Processing (ADP) employment survey for November on Wednesday 5 December, which typically precedes the government''''s report by two days, has shown a sharply higher-than-expected reading on job growth of 189,000 for the month.

This has prompted expectations of a 90,000 gain in November non-farm payrolls in the aftermath of October''''s 166,000 increase. Economists'''' had made a median forecast of a mere 50,000 increase, but the huge ADP increase raises the odds of a sharply higher forecast, though conventional wisdom dictates that that there may well be an unwinding of that strength in November.

Now all eyes are on Friday''s release of the government''''s employment report for November, which will be closely watched by the markets and the US Federal Reserve. Everyone is crossing their fingers for signs that the labour market is holding up despite the turmoil in credit markets.

Critical payroll figures, to be released on Friday, are expected to show weakness, in line with a decline in manufacturing, construction, retail, finance and temporary employment. Most other industries are likely to show healthy growth.

But, if payrolls even partly reflect the robust figures found in the ADP report, the Fed may no longer face pressure for a 50 basis point interest cut on 11 December. The Fed will definitely disappoint at least half the market with next Tuesday''''s policy decision; expectations are split halfway over whether the cut will be by 25 basis points or 50 basis points. But what happens in the unlikely event that the Fed leaves rates unchanged?

Friday''s report is also likely to show that the unemployment rate is up to 4.8 per cent from 4.7 per cent. The work week is expected to hold steady at 33.8 hours. Hourly earnings are expected to increase by 0.3 per cent, which should take the year-on-year earnings growth close to 3.8 per cent.

Surprisingly, the ADP data shows stabilisation in both construction and financial sector employment. This raises the possibility that payroll growth in November could exceed forecasts, along with a surge in service sector employment.

But the University of Michigan''''s consumer sentiment survey fell from 80.9 to 76.1 and the Conference Board''''s consumer confidence survey was from down from 95.2 to in 87.3 in November. These surveys include consumer perceptions of the availability of jobs, and show a contrarian view to the ADP survey, suggesting that the November payroll report could be down.

The employment components from various factory sentiment surveys have generally outperformed factory payroll figures till October. But this gap may narrow in November and December. For November, the Institute for Supply Management''''s employment component dropped from 52 to 47.8 - the lowest since August 2003.

Is this an easing from unexpectedly high performance recently, or further factory sector weakness? The employment component of the ISM non-manufacturing index, which fell from 51.8 in October to 50.8 in November, suggests a further weakening is to come in service sector employment.