The October employment report is not expected to show much in the way of new job growth, but the euphoria over Fed easing may trump any concern in markets Friday.
Economists are forecasting a non-farm payrolls gain of 60,000 for October, when the number is released at 8:30 a.m.
In September, the monthly report showed the creation of 64,000 private sector jobs, but a total loss of 95,000 because of government job losses.
Stocks vaulted higher Thursday, as the Fed's announcement of a $600 billion quatitative easing programfired up a global risk rally.
The major stock indices all finished above their year highs, and the Dow and S&P 500 finished at levels not seen since the weeks around the failure of Lehman Brothers in September, 2008.
"I don't see a reason why the (jobs) numbers should be strong," said Deutsche Bank chief U.S. economists Joseph LaVorgna.
He noted, however, that there were surprise gains in the ISM manufacturing and service sector reports this week, as well as the better-than-expected private payroll number from ADP.
"It would be nice if it was...There's probably some upside risk. We're due for a big number, but I don't know why it has to be tomorrow," he said. "If the number is good, it will be big for stocks."
LaVorgna expects private payrolls to grow by 90,000, and the total non-farm payroll number to be 80,000.
The consensus among economists for growth in private sector payrolls is 80,000, and the unemployment rate is expected to hold at 9.6 percent.
Pierpont Securities chief economist Stephen Stanley expects to see 125,000 jobs added in October.
Economists expect losses in public sector jobs to have less of an impact in October than in prior months, when the federal government was furloughing temporary census workers and state and local governments had big layoffs.
"The consensus is arguing the deceleration we had in September continued. I think the labor market is languishing, but I don't think it got worse. I think a lot of firms were waiting for the election to see how things are going to go and how taxes are going to be. I really think there's a chance we see a real acceleration as we head into 2011," said Stephen Stanley, chief economist at Pierpont Securities.
Already a new tone from the White House is encouraging some in the markets that the environment for business might change.
A White House spokesman Thursday said the president would consider discussing extending all of the Bush tax cuts. President Obama had opposed extending tax cuts for the wealthiest Americans.
He also reached out to business Wednesday, in his first comments after Tuesday's major Republican win in Congressional races.
"I think we'll see more private sector growth coming from employment numbers, between the QE2 and the election behind us," said Joseph Quinlan, chief market strategist at U.S. Trust. "I think a president willing to come a little to the center, reach across the aisle and work with Congress...that could be the tipping point for getting CEOs to loosen the purse strings and start their hiring."
US Dollar Continues Its Slide
The dollar, which has been falling since the Fed first mentioned new easing in August, continued its slide Thursday.
The dollar was down 0.6 percent against the euro, to a level of $1.4207, and it lost another 0.6 percent against the yen.
The Dow jumped 219 points, or nearly 2 percent to 11,434, its highest level since Sept. 8, 2008. The Dow Transports also rose, gaining 1.3 percent to 4923, the highest level since Sept. 19, 2008.
The S&P 500 rose 23 or 1.9 percent to 1221, its highest close since Sept. 19, 2008. The Nasdaq rose 37 points to 2577, its highest level since Jan. 3, 2008.
A Wall Street Journal report that the Fed may allow the stronger banks to raise dividends helped lift the financials. The group was up 3,4 percent, and was the best performer.
Commodities also rose, and oil bubbled up 2.1 percent to $86.49 per barrel, its highest level in seven months. It was helped by OPEC comments that $90 oil will not hurt the global economy.
Other commodities also soared. Gold set another record high, up 3.4 percent to $1,383.10 per ounce, and copper was at $3.9120 a pound, a two year high. Sugar was at a 30-year high, and coffee was at its highest level in 13 years.
The Fed plans to buy $600 billion in Treasury securities by the end of the first half of next year, and bond prices gained, especially in the middle of the curve, where the Fed's buying will be strongest.
"This is a market digesting the news of yesterday. The Fed is providing easing, and it's going to impact all markets. The question is longer term is this viewed as a reason to be buying Treasurys now or should it be viewed as shifting your allocation out into other sectors," said George Goncalves, head of Treasury strategy for Nomura Americas.
"We are of the view that the reason the Fed is doing this is to get investors into other asset classes, not into Treasurys...stocks are doing well and other spreads are as well. That's the important message," he said.
The 5-year note was yielding 1.024 Thursday, and is likely to break below 1 percent in the near future, said John Spinello, Treasury strategist at Jefferies.
The 2-year yield was at 0.343 percent but it had dipped to a record 0.312 earlier in the day.
The 10-year was lower at 2.489 percent, but the 30-year bond's yield gained to 4.061 percent, as investors sold the long bond.
Traders and analysts expect the weaker dollar trend to continue, now that the Fed has said it will launch quantitative easing.
"The trend is in place. I think the dollar stays weak, absent corrective recoveries or massive, massive policy intervention. I do think the trend is going to continue and its going to create a problem down the road. The world won't stand for a continued debilitated dollar," said Spinello.
In addition to the jobs report, there are pending home sales at 10 a.m. and consumer credit for September at 3 p.m.
The Atlanta Fed holds a conference in Jekyll Island, Ga. where an army of Fed presidents and officials will moderate panels on Fed policy. Fed Chairman Ben Bernanke speaks to students in Jacksonville, Fla. at 2 p.m., and he speaks at the Jekyll Island conference Saturday.
Earnings are expected from Toyota , Coventry Health Care , Washington Post , DISH Network , Liberty Media and Brookfield Asset Management Friday morning.
Warren Buffet's Berkshire Hathaway releases earnings after the bell.
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