November's employment picture may prove to be a bit brighter than Wall Street has been expecting.
Economists have been forecasting that a total 125,000 non farm payrolls were added in November, but that number could move higher ahead of Friday's monthly jobs report.
Several economists raised their forecasts and others were giving their numbers another look Wednesday, after ADP's private sector report showed an increase of 206,000.
Economists expect the private sector added a total 150,000 jobs in November, which were offset by layoffs in the public sector. The unemployment rate is expected to hold steady at 9 percent.
Traders turned their attention to the November jobs report after better U.S. data and coordinated central bank action sparked a major stock market rally. "If that jobs report comes in at 150,000, 160,000 or even 200,000, you've got a [more prolonged] rally here," said Dan Greenhaus, global strategist with BTIG.
"It continues to speak to the current economic difficulites—the fact we would celebrate 160,000 jobs, if I'm right. It speaks to the current state of the economy and how low expectations have gotten," Greenhaus said.
While better, the jobs report promises to still be very weak and below the level of employment gains needed. "I don't think that gets the job done. It's better than the 80,000 we had last month, but I dont' think it's enought of an improvement to really get things going," said Steve Massocca of Wedbush.
While ADP has not been an accurate predictor of jobs, economists note there are other factors that also tell the same story, including the string of declining weekly jobless claims reports. Last week, the four week average fell to 394,250, the lowest level since April.
Credit Suisse economist Jonathan Basile raised his estimate Wednesday to a total 170,000 nonfarm payrolls from 130,000. Deutsche Bank raised its forecast to 150,000 from 125,000, and Capital Economics was reported to have raised its expectation to 140,000 from 100,000.
Economists at both Goldman Sachs and J.P. Morgan tell CNBC their numbers could be at risk of being too low. Neither firm has changed their forecast, and Goldman expects 100,000 non farm payrolls were added in November, while J.P. Morgan forecasts a total 130,000. In October, a total 80,000 payrolls were added
"Our forecast would imply it's getting better than last month...Jobless claims are getting lower, and it doesn't look like the labor market has deteriorated," said Goldman Sachs economist Andrew Tilton. "In the employment growth side, it seems things are steady to a bit stronger."
J.P. Morgan economist Michael Feroli said he expects private sector job growth of 150,000. He may give the number another look after Thursday's data. "If claims are good, and ISM is good, then there might be some reason to think about it," he said.
"There's some fundamental reason why job growth can be stronger and there's some technical reasons," said Basile. "We upped our numbers because the ADP is stronger than thought. I think people say there tends to be an overstatement in November by this report, but we'll see what it says Friday because there are other reasons. Fundamental ones. Job openings are up. Firings are down."
Basile said the labor department JOLTS report showed an increase in job openings, and the consumer confidence data Tuesday showed a better attitude about hiring.
"ADP told us an awful lot of small businesses hired. They had the biggest increase in five years for small business hiring. It was 110,000 for the month," he said.
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