Upside risk of a very strong gain in non-farm payrolls

Our econometric model points to a 300,000 gain in payrolls in November although, hedging our bets, we have trimmed our actual forecast to 250,000. Nevertheless, any gain above 200,000 should be enough to push the unemployment rate down a tick to 5.7%. With that rate getting very close to its equilibrium level, which Fed officials put at 5.2% to 5.5%, there is a strong case to be made that interest rates should rise soon.