A fourth interest rate hike may be a foregone conclusion Wednesday but the

Federal Reserve's

next move in December is far from certain, and analysts say it's likely to remain that way for a while.

After a much stronger-than-expected employment report for October, there is little doubt that the central bank will raise its target rate by 25 basis points to 2%. But with a number of conflicting forces at work in the economy, it's not clear that a fifth rate hike is coming next month.

"If you look at things like the weak dollar and strong gold prices, it suggests Fed policy is still too loose," said Gary Thayer, chief economist at A.G. Edwards. "But

high oil prices are a risk."

The dollar recently fell to a record low against the euro, suggesting that central bankers need to raise rates to attract foreign capital. But at the same time, high energy prices are taking a bite out of consumer spending, indicating the Fed could take a breather in December.

Vincent Malanga, president of LaSalle Economics, said he doesn't see the need for a fifth rate hike this year.

"With the core consumption deflator so low, monetary policy is not terribly accommodative, and there are no new tax cuts on the horizon," he said. "While we fully expect the dollar to move lower over the next year, its impact on the trade gap is likely to be inconsequential. Moreover, energy prices will still be a near-term drag on the economy."

In a speech last month, Fed Chairman Alan Greenspan said high oil prices had reduced economic growth by about 0.75 of a percentage point this year. In its policy statement Wednesday, the Fed "should continue to acknowledge the potential downside risks posed by higher energy prices," said Lehman Brothers economist Ethan Harris.

Although oil prices have fallen about 13% from more than $55 a barrel in October, they are still sitting at historically high levels. As a result, economists have cut their forecasts for economic growth in the fourth quarter to 3.5% from 3.8%, according to a recent survey by

Bloomberg

.

Still, Harris noted that the economy has clearly "regained some lost traction from earlier this summer" and said the strong employment report for October has convinced him that the Fed will hike rates again in December.

Fed futures traders seem to agree. They are now pricing in an 80% chance of a quarter-point hike next month, up from less than 50% before the jobs data were released.

"Payroll growth averaging 225,000 over the last three months gives the Fed plenty of scope to justify additional rate hikes," Harris said.

Diane Swonk, chief economist at Bank One, believes the Fed's policy statement on Wednesday will recognize the improvement in the job market. In its last directive, the bank said labor market conditions had improved "modestly."

But Swonk also believes the Fed will temper its enthusiasm because the payroll data were skewed by cleanup and reconstruction efforts after four hurricanes swept through the southeastern U.S.

Nonfarm payrolls surged by 337,000 in October, with about 71,000 coming from the construction sector. Meanwhile, the unemployment rate inched up to 5.5% from 5.4%, manufacturing employment declined, and the number of industries adding workers fell to 58.1% from 61% in the prior month.

"The headline was exaggerated and slack was not taken up," said David Rosenberg, chief economist at Merrill Lynch. "If, as we expect, employment growth slips back a notch when the November data are released on Dec. 3, then the odds of yet another hike will have proven to have been overdone."

Ian Shepherdson, chief economist at High Frequency Economics, isn't so sure. Over the next few months, he said, private payroll growth should average between 100,000 and 150,000. "But if we allow for growth of state and local employment of perhaps 50,000 per month, these anemic numbers will look respectable and will make Fed rate hikes in December and February more likely."

The Fed isn't likely to telegraph its next move on Wednesday but will probably repeat that policy accommodation can be removed at a "measured pace." It is also likely to say that future rate hikes are dependent on the economic data and that the upside and downside risks to growth and inflation are equal.

If the Fed were to raise rates in December, economists say it would be highly unusual. Over the past 20 years, the central bank has increased rates in December just twice, in 1988 and 1986. "I'm not sure that policymakers want to raise rates right before the holidays," said Thayer. "But a lot depends on what happens between now and then."