Joseph LaVorgna, chief U.S. economist at Deutsche Bank, raised his forecast for job growth in December to 190,000 jobs, up from 150,000.
Credit Suisse increased its forecast to 185,000, up from 165,000.
"Given that we have restraints, the labor market data do appear to be improving," said Dana Saporta, an economist at Credit Suisse.
Still, many economists remained cautious about where the job market is headed. While Congress and the White House reached a deal this week that removed the threat of tax increases to most Americans, they postponed the more difficult decisions on cutting spending. And the government must also increase its $16.4 trillion borrowing limit by late February or risk defaulting on its debt.Congressional Republicans are pressing for deep spending cuts in return for any increase in the borrowing limit. President Barack Obama has repeatedly said wants the issues kept separate. The economy has added about 150,000 jobs a month, on average, over the past two years. That's too few to rapidly lower the unemployment rate. Hiring probably won't rise above the current 150,000 per month trend until after the borrowing limit is resolved, economists say. A similar fight over raising the borrowing limit in 2011 was only settled at the last hour and nearly brought the nation to the brink of default. "That's not an environment where you're likely to be taking risks," such as boosting hiring, said Nigel Gault, chief U.S. economist at IHS Global Insight. Even with modest gains in hiring, the unemployment rate remains high. It fell to 7.7 percent in November from 7.9 percent in October. But that was mostly because many of the unemployed stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work. The number of people receiving jobless benefits fell to 5.4 million in the week ended Dec. 15, the latest data available. That's down about 70,000 from the previous week. The figure includes about 2.1 million people receiving emergency benefits paid for by the federal government. The White House and Congress agreed earlier this week to extend that program for another year.