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Will Jobs, Retail Data Fuel or Kill Wall Street's Buzz?

Weekly jobless claims data and ADP’s private sector payroll report prime the markets Thursday for the December employment report.

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The government’s December jobs report is released Friday, and it has been the buzz of trading floors all week, as investors watch each piece of data for relevance to the jobs market.

There is also a gusher of monthly chain store sales Thursday, which analysts and economists will pick over to see if they met the rosy picture of holiday sales that some were expecting. Thomson Reuters expects the retailers it follows to produce a 3.3 percent December gain, with discounters the strongest, up 5.3 percent, and drug stores, the weakest (down 0.1 percent).

Discounting was a big theme this holiday season, as retailers took margin hits to lure in consumers. “It does look like the consumer did a better job on holiday shopping ... when you still have high unemployment and modest wage growth, retailers have to give the consumer a reason to part with their money,” said Credit Suisse economist Jonathan Basile.

Meanwhile, economists have been expecting to see total job growth of about 155,000 Friday in the December jobs report, with about 175,000 added in the private sector. The ADP report, released at 8:15 a.m. Thursday, is expected to show that 178,000 private sector jobs were added.

Many economists do not forecast the ADP private sector number or see it as necessarily reflecting the government number, but they do view it as another piece of the payroll picture.

What is being watched closely is the weekly unemployment claims, which have been trending below 400,000 for a month. Claims are expected to be 375,000, when they are reported at 8:30 a.m. Thursday. While not relevant to the December employment report, they are expected to show a continuing trend of fewer layoffs.

“I’ve been impressed by them. Though it’s a volatile period, the trend is going down. That kind of hammers the point home that firms feel good about the outlook,” Basile said.

Deutsche Bank economist Joseph LaVorgna is watching the ISM nonmanufacturing index, reported at 10 a.m. Thursday, to see whether the employment component rose as it did in the ISM manufacturing report earlier this week.

He expects to see 155,000 nonfarm payrolls in Friday’s report, and is expecting to see revisions for November’s number which came in at a total of 120,000. The November report also showed a surprise drop in the unemployment rate to 8.6 percent.

LaVorgna said it’s possible December’s total nonfarm payrolls could, in reality, be more like 200,000, but many jobs will more likely show up in the revisions in February as they have done month after month.

There are also a few earnings of interest Thursday, including Constellation Brands and Monsanto, before the opening bell. Apollo Group and Family Dollar report after the close.

Stocks Wednesday closed mixed, with the Dow up 21 at 12,418 and the S&P 500 up less than a point at 1277. Nasdaq was down less than a point at 2648.

Concerns about Europe’s debt crisis and a decline in the euro held back early gains. The market turned positive at midday, not long after the European close.

Investors will also be watching the Bank of England’s rate meeting, and France issues 7 to 8 billion euros in 10-year and 30-year bonds. There is also a 3 billion euro sale of 3 year bonds by the the euro zone’s rescue fund, EFSF.

Follow Patti Domm on Twitter: @pattidomm

Disclaimer

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • CNBC Personal Finance Correspondent

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.