Traders are watching to see if any surprises show up in the October employment report, the last before the election, but the real surprise could come in the November number when the aftereffects of Super Storm Sandy are felt in the job market.
Economists expect the October report to show a tepid 125,000 new nonfarm payrolls and a steady unemployment rate of 7.8 percent, according to Reuters. The report has been considered key since it is the final report card on job growth ahead of Tuesday's presidential election, and expectations are low.
But it also may be the one to watch ahead of November's report, when some economists think the impact from Sandy will result in less hiring, despite the need for construction and other workers in the storm hit east coast corridor. Estimates of economic impact from Sandy are as high as $50 billion, and Eqecat Thursday said it now expects insured damage to total $10 to $20 billion, with 64 percent of the losses in New York and New Jersey.
"We won't see the effect of hurricane Sandy or storm Sandy (in the October report)…It won't show up because the survey was taken before the disaster hit," said Diane Swonk, chief economist at Mesirow Financial.
(Read More: US Northeast Begins a Slow Recovery After Epic Storm)
"Any interruption to hours worked and hourly workers, it would be somewhat offset in the month of November by the increase in overtime for emergency workers and with the increase with construction workers coming in. It redistributes employment because of the need to get things up and running as quickly as possible. It ends up being winners and losers," she said.
Swonk said the storm will provide some fiscal stimulus as aid money pours into the hard hit areas of the east coast, particularly the New Jersey coast and New York City and Long Island. "There will be some enormous government investment outlays from Sandy. That money is literally being dropped from the skies, from helicopters. How it shows up in the numbers has yet to be seen because there are offsets."
(Read More: Election Officials Scramble in Storm's Aftermath)
Deutsche Bank chief U.S. economist Joseph LaVorgna said Sandy could result in a big drop off in hirings in November. "It could be 100,000, maybe more," he said. He said the trend in employment growth, when smoothed out after revisions, has stayed at about 150,000 a month over the last two years. He expects to see the impact of Sandy first show up in jobless claims, but he notes that after Hurricane Katrina hit New Orleans, claims spiked but not right away.
"Even though you see clear impact on things like retail sales, industrial production and employment, it's hard to tease out what the effects are on GDP," LaVorgna said.
The October jobs report also follows September's surprise 0.3 percent drop in the unemployment rate, even as the economy added just 114,000 new jobs. ADP's private sector employment report showed companies added 158,000 workers in October, the biggest gain in eight months. But ADP also changed its methodology this month, and its 162,000 September jobs were revised to just 88,200.
As for October, it should be very similar to September when the report is released at 8:30 a.m. ET Friday. "It shouldn't be significantly stronger, or significantly weaker," said LaVorgna. He expects to see 125,000 nonfarm payrolls and a rise in the unemployment rate to 7.9 percent.
He thinks the election played a role in two ways. First, he and other economists believe the fears of the "fiscal cliff" made companies hold back on hiring. The "cliff" is the dual expiration of tax cuts, and the automatic spending cuts that Congress will try to avert in the post-election lame duck session. LaVorgna thinks that biggest impact of that was actually more in the summer, and that companies may now start to look toward resolution of the cliff after the election.
But he also said the election itself may have resulted in some hiring. "I think there was an election effect. You had a lot of young people volunteering and getting paid. We did see a lot of 20 to 24-year old hiring last month," he said.
October also probably saw continued softness in manufacturing hiring and an increase in services hiring. The ISM manufacturing survey's employment index Thursday fell from 54.7 to 52.1.
"We think maybe you could see another contraction in manufacturing employment," said J.P. Morgan economist Michael Feroli. "At some point, you probably expect a modest increase in construction payrolls. We've seen a bit recently, and I think that probably continues. Government probably contracts a little more, but not as much as it had."
Swonk also expects to see more construction jobs, particularly in residential. She expects to see 138,000 payrolls and an unemployment rate of 7.9 percent.
"We're talking about an economy that's come off the doldrums of the spring swoon, but still not really growing fast enough," she said. "One where it's a relay race, where the manufacturing sector, the shining start has now handed off to consumer and housing, and the headwinds from state and local government layoffs are abating."
Besides the jobs report, there is a report on factory orders at 10 a.m.