The Labor Department's monthly snapshot on employment has always been crucial for investors trying to figure out where the economy is headed. This month's report comes at a time when the market cannot figure out which direction it wants to go. Economic indicators domestically and around the globe are as murky as they've been in months.
Markets have alternated rallies and retreats in recent weeks, sometimes even within a single trading session, following fallout from European debt problems and recent reports on housing, manufacturing and consumer confidence that sent mixed signals.
On top of that, the last two weekly jobless claims reports have shown surprise jumps in people filing for unemployment for the first time. In both weeks economists had forecast declines. The uncertainty means investors will delve deeply into the monthly employment report. Underneath headline numbers that aren't apt to improve much, traders and analysts will dissect other data from the report looking for signs that the economy is on the right path.
The report could suggest the U.S. is following Europe, where growth is almost nonexistent, or it could show that the fourth-quarter gross domestic product jump of 5.9 percent can be sustained.
"Job creation is fundamentally important," said Markus Fairwaether, a Senior Strategist at Seattle based Lombard Omega, Inc. "In the end, if we create jobs, we'll have consumers with dollars in their pockets," Fairweather said before adding, “Consumer spending accounts for about 70 percent of U.S. economic growth, making it critical to a strong recovery.”
The headline numbers in Friday's report, the unemployment rate and jobs added or lost, will still be important. Economists polled by Thomson Reuters project the unemployment rate rose to 9.8 percent in February from 9.7 percent a month earlier.
At the peak of the recession, employers were shedding more than 700,000 jobs a month. In February, they are expected to have cut 20,000 jobs for the second straight month. "Job losses have slowed significantly,"
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