All eyes on the job market

NEW YORK (CNNMoney.com) -- A wave of disappointing economic reports has revived fears that the recovery is unsustainable, upping the ante for this week's batch of economic news, including the big February jobs report Friday.

A strong rally in the last nine months of 2009 was fueled by a copious amount of fiscal and monetary stimulus, but also on bets that 2010 was a big recovery year. So far, the results have been so-so, and that's left markets vulnerable and volatile.

In the last week alone, reports on new and existing home sales, jobless claims, durable goods orders, consumer confidence and manufacturing have all missed expectations. Worries about a Greek debt default spreading to other vulnerable European nations have resurfaced -- after quieting for a few weeks.

On the upside, the fourth-quarter reporting period has been positive, with earnings jumping 201% from a year earlier and 16% from a year earlier without the financial sector. Last week's revision to fourth-quarter GDP growth was better than expected, with the economy rising at a 5.9% annualized rate, the fastest pace in six years.

"There's been an extraordinary amount of stimulus put to work, and in terms of stabilizing the global economy in the short term, it did its job," said Ryan Atkinson, market analyst at Balestra Capital. "The question is whether you can get sustained global growth from that."

Jobs: With the unemployment rate near 26-year highs just below 10% -- and unlikely to improve much this year -- the focus right now is on jobs.

On Wednesday, outplacement services firm Challenger, Gray & Christmas reports on planned job cuts for February. But a bigger market mover will be the February reading on private sector employment from payroll services firm ADP.

ADP is expected to report that private-sector employers cut 10,000 jobs from their payrolls in February after cutting 22,000 jobs in January, according to a consensus of economists surveyed by Briefing.com. The report is often a precursor to the more widely watched government jobs report Friday.

The government's weekly jobless claims report is due Thursday. Claims have jumped 12% over the past two weeks, due in part to the impact from the severe winter storms on the East Coast. The storms may impact both the February and March employment numbers.

In addition to the storm impact, "the rise in first-time jobless claims shows that businesses aren't ready to hire people back," said Robert McGee, portfolio manager at CS McKee. "It's going to be a longer period until we see a real recovery than people had anticipated."

Meanwhile, a divided Senate failed to vote late last week to extend the deadline for unemployment benefits, a non-decision that will effect countless unemployed Americans.

"We seem to be on the cusp of net job growth although it won't be enough to help the unemployment rate over the next few months," said Scott Anderson, senior economist at Wells Fargo. "The only thing that could throw a monkey wrench into that potential growth is the winter storms."

The February jobs report is due out before the start of trading Friday. Employers are expected to have cut 20,000 jobs from their payrolls in February after cutting 20,000 in January. The unemployment rate, generated by a separate survey, is expected to have risen to 9.8% from 9.7%.

Monday: The Commerce Department releases its January personal income and spending reports before the start of trading. Income is expected to have risen 0.4% after climbing 0.4% in the previous month. Spending is expected to have increased 0.4% after gaining 0.2% in the previous month.

The PCE deflator, the report's inflation component, is expected to have risen 0.1% after advancing 0.1% in the previous month.

Construction spending, due out after the start of trading, is expected to have fallen 0.6% in January after decreasing 1.2% in the previous month.

The Institute for Supply Management (ISM) releases its manufacturing index after the start of trading. The ISM index is expected to have fallen to 58 in February from 58.4 in January, which would still indicate an expansion in the sector.

Tuesday: February auto and truck sales are due through the afternoon, with Toyota Motor expected to take a hit.

The troubled automaker's executives were on Capitol Hill last week to discuss safety issues related to the recall of over 8 million vehicles. Between the recalls and the hit to its reputation, Toyota is expected to report that market share fell to a five-year low. Sales are expected to have fallen 10% from a year ago.

However, other companies are expected to see better results, with General Motors and Ford Motor (F, Fortune 500) among the companies expected to post sales increases from a year ago.

Wednesday: The ISM services sector index for February is expected to have risen to 51 from 50.5 in January, according to forecasts, a signal of further expansion in the sector.

The weekly oil inventories report is due in the morning and the Federal Reserve's "beige book" reading on the economy is due in the afternoon.

Thursday: January factory orders, from the Commerce Department, are expected to have risen 1.2% after increasing 1% in December.

The January pending home sales index is expected to have risen 1.7% after growing 1% in December.

The nation's retailers will be releasing February sales throughout the morning.

Friday: The Friday jobs report is the main event of the day.