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Market Preview: Gauging the Jobs Report

Tickers in this article: SPY ^DJI FB C ^GSPC STZ BAC ^IXIC ZNGA

Updated from 6:23 p.m. ET for latest after-hours share prices and additional commentary on the September jobs report .

NEW YORK ( TheStreet) -- The September jobs report is shaping up to be a very tough call.

According to, the consensus is looking for an increase in nonfarm payrolls of 120,000 last month with the unemployment rate remaining stuck at 8.1%.

That would be a nice jump from job creation of 96,000 in August and this week's data -- the ADP employment change report and weekly initial claims -- seemed to bode well for the government release.

Deutsche Bank, however, was keeping its expectations in check, noting some holes in the data while leaving its estimate for payrolls to swell by 110,000 intact.

"While the headline readings in both ISM surveys rose, the employment sub-index of the non-manufacturing ISM declined (by 2.7 points); similarly, ADP employment was softer in September relative to August," the firm said. "With the overall tone of the key labor indicators similar to that of August, it appears that the September report will present 'more of the same' in terms of modest-but-positive payroll gains and a stagnant unemployment rate."

There was also some disturbing data on small business hiring from the National Federation of Independent Business on Thursday.

The association released some of the results of its September survey, which is based on the responses of nearly 700 sampled members, saying the net percent of small business owners who increased their total number of employees during the month fell 5 percentage points to a net negative 3%. The NFIB also said just 17% of small business owners have current job openings, which is down a point form August.

"In a healthy economy, that number would typically be in the high 20's," said Holly Wade, senior policy analyst for the NFIB Research Foundation.

A quick sample of available estimates for the rise in nonfarm payrolls last month shows a real divergence in expectations. At the high end, there's's own forecast of 165,000, which seems pretty ambitious. Jim O'Sullivan, chief U.S. economist at High Frequency Economics , also sees a surprise to the upside.

"Our payrolls forecast for today is 135K, a bit stronger than the 100K benchmark and the 115K consensus, but not nearly enough to satisfy Fed officials," said O'Sullivan, who noted the last few monthly reports have been a mixed bag. "Even if the gain is much larger than 135K, the volatility in the report will caution against extrapolating."

Capital Economics is at the lower end with its model projecting the addition of just 100,000 jobs in September, a figure suggesting the month was basically status quo with August.

The political implications of Friday's report are also significant for investors as a blowout better than expected number would be a big positive for President Barack Obama and go a long way toward slowing the momentum that Republican presidential candidate Mitt Romney has built up with his strong performance in Wednesday night's debate.