Wall St.: Plenty of worries from job report

NEW YORK (CNNMoney.com) -- Friday's jobs report is particularly worrisome to Wall Street, not just because of what it might say about the economy but also because of when it will say it - on a market holiday.

The New York Stock Exchange and Nasdaq are closed for the Good Friday holiday, and that's made traders nervous about the report, which typically sets the tone for trading the rest of the day when it's released on regular market days.

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"If a jobs report falls in the forest and there isn't anyone around to hear it, will it make a sound?" joked Art Hogan, chief market analyst at Jefferies & Co.

The bond markets will have holiday-shortened hours.

Economists surveyed by Briefing.com forecast that employers added 135,000 jobs to payrolls in March, up from 97,000 in February.

The unemployment rate is expected to rise to 4.6 percent from 4.5 percent. And average hourly pay is expected to post a 0.3 percent increase, after a larger than expected 0.4 percent rise in February.

A particularly strong report - one showing lower unemployment or higher wages than expected, for example - could throw more cold water on hopes that the Federal Reserve will cut interest rates later this year in order to spur on the economy rather than keeping rates steady, or even raising them again, as a way to fight inflation.

The markets rallied on March 21 after the Fed's most recent statement raised hopes again about it being open to a rate cut, then fell following Congressional testimony by Federal Reserve Chairman Ben Bernanke a week later that seemed to dash those rate cut hopes.

That might suggest a stronger than expected report could hurt stocks when trading resumes Monday. But Hogan said there's enough nervousness about hiring that the market is likely to cheer belatedly any report that shows strength.

"I don't think you can have a too-hot number," he said. "We're more interested in the economy right now than in just interest rates."

David Wyss, chief economist for Standard & Poor's, is forecasting only a 120,000 gain in jobs, a bit weaker than consensus. He said the recent weakness in home construction and manufacturing will be closely watched in the report.

"You should be starting to see the usual seasonal upswing in construction hiring," said Wyss. "We'll be watching for signs that is beginning to happen, or not happen, which is more likely. Manufacturing is an issue, given the weakness of orders the last few months."

Overall, there are growing worries that a slowdown in the economy and in corporate profits will lead to sluggish job growth at best for the rest of the year. A survey by temporary staffing firm Manpower last month showed 59 percent of 14,000 employers polled said they anticipate no change in the pace of hiring in the second quarter.

And a private sector survey showed employment increased by 106,000 in March, according to an estimate by payroll services provider ADP in a report Wednesday, up from a revised 65,000 in February.

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