Wall Street Gets in Position for Jobs Report

(Updated with Challenger Gray & Christmas data, final closing prices of gold and mining stocks.)

NEW YORK (TheStreet) -- All signs are pointing to a worse-than-expected nonfarm payrolls report Friday morning, market analysts say, but they argue that even a disappointing release won't put a significant dent in equity markets.

The Labor Department's official jobs report, due at 8:30 a.m. EDT Friday, is expected to say the U.S. economy lost 225,000 jobs last month, according to a Reuters poll of economists. The unemployment rate is expected to tick higher to 9.5% from 9.4% in July.

Equity markets have faltered leading up to Friday's report, with the Dow Jones Industrial Average stringing together four straight losing sessions ended Wednesday that lopped 300 points, or 3.1%, off the blue-chip average. While economic data related to housing and manufacturing have shown dramatic improvements lately, it appears short-term traders remain nervous about the U.S. job market.

Unfortunately, while the consensus is for a loss of only 225,000 jobs -- which would be the fewest jobs lost per month in a year's time -- there are worrisome indications that the number of disappearing jobs will be greater than economists are anticipating.

Ian Shepherdson, chief economist with High Frequency Economics, said that recent weekly claims numbers have been disappointing and that the downward trend appears to have stalled. Earlier Thursday, the Labor Department said initial jobless claims dipped to 570,000 last week from a revised 574,000 in the prior week. However, continuing claims rose to 6.23 million from a revised 6.14 million.

"With claims at the current level, there is little chance that the rate of decline of payrolls can be sustained at less than 200,000 per month, which means the unemployment rate will keep rising," Shepherdson wrote in an email Thursday.