The markets have high expectations for the February employment report, even if economists are reluctant to go too far out on a limb after several months of big misses by the consensus forecasts.
But traders, betting on a string of better employment-related data this week, are more bullish than the forecasters and are whispering about non-farm payroll numbers of 300,000 or even more.
Economists are forecasting that roughly 200,000 jobs were added in February, up from a miniscule 36,000 jobs in January. They also expect to see an unemployment rate of 9.1 percent, up slightly from January's 9 percent, when the report is released at 8:30am ET Friday.
The January number was about 100,000 fewer than expected, and some economists think that some of those jobs missing from January were under-reported due to bad weather, and may show up in February's number instead.
Moody's Economy.com chief economist Mark Zandi expects to see 250,000 payrolls, but he expects 100,000 of those are related to the weather loss from January.
"So without the weather it's probably around 150,000, which is consistent with stable unemployment, but not enough to bring down unemployment. We need better. I think we'll eventually get that, but I've been thinking that for a couple of months. We're on the verge. Everything is pointing in that direction...Everything is pointing to a better job market — except for the payroll numbers," he said.
"I'm at 200,000 with wide dispersion," said Miller Tabak's chief economic strategist Dan Greenhaus. "I wouldn't be surprised if it was 250,000 and I wouldn't be surprised if it was 175,000."
Economists say the U.S. economy is finally on the verge of creating jobs at a rate of several hundred thousand a month, but the February employment report may not tell that story.
"I don't think it would be a disaster for the market if it doesn't come in at that level," said Cowen's head trader John O'Donoghue of the whisper numbers.
"There's still an enormous amount of money that hasn't been committed to equities. There's plenty of money that's sitting on the sidelines and it may be it catches it, if we get a little correction, or it chases it, if the number comes in."
Stocks on Thursday soared on optimism about the economy as oil prices moved slightly lower. The Dow was up 191 points,or 1.6 percent to 12,258, and the S&P 500 rose 1.7 percent to 1330, just 13 points below where it was before the market started to sell off on concerns about Libya and rising oil prices.
There were encouraging employment news in both the ISM manufacturing and services surveys this week, and in the manufacturing survey, the employment reading was at its highest level since 1973. The ADP private sector payrolls this week were reported at 217,000, and the NFIB small business survey Thursday reported hiring plans were positive for a fifth straight month, and job openings at the highest level since September, 2008.
Also encouraging was Thursday's weekly jobless claims report of 368,000, the second week in a row below 400,000.
"I think we should start to see (monthly job growth of) 150,000 to 250,000 range," said Mesirow Financial chief economist Diane Swonk.
"It's going to be in fits and starts. If we stay in that range and average a little above 200,000, it will generate a little over 2.5 million to 2.7 million jobs this year. That would be good but it would leave us four million in the hole." Swonk expects to see 199,000 non farm payrolls for February.
"The biggest thing to see is how broad-based the gains are," said Swonk. "So far, it's been clear the manufacturing sector is adding jobs but the much larger services sector has been a laggard."
Economists expect to see the unemployment rate pick up as people who had stopped looking for work begin to seek jobs again. Deutsche Bank economist Joseph LaVorgna is actually trimming his expectation for the unemployment rate to 8.9 percent.
"I think that could surprise people on Friday," he said.
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