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Unemployment Rate: Can It Best the Euro?

NEW YORK ( TheStreet) -- The monthly market catalyst known as the government jobs report (and its obsessively followed unemployment rate) is due out on Friday morning. This time around, the nonfarm payroll data is contending with the European debt contagion in its attempt to keep its regular role as a heavy influencer of trading action.

Will an improvement in nonfarm payroll data -- and the consensus has ticked up this week from 180,000 jobs added to 187,000 jobs -- be able to stop the correction that has lopped off more than 5% of the S&P 500 in the past week, and completely wiped out 2010 gains in world indexes?

If the relative influence of other recent positive data points coming out of the U.S. is any indication, the government jobs report will have a tough time stopping the current European-debt triggered market correction.

Automatic Data Processing reported that private sector jobs grew by 32,000 in April, while layoffs fell to a nearly four-year low.

The ISM manufacturing data came in this week all positive, too, with a primary manufacturing index number above 60, the highest index number since June 2004.

Even so, neither positive data point about the U.S. economy had the power to change the market message of the week: "sell, sell, sell."

The 32,000 jobs reported by ADP was the biggest increase since January 2008, and followed a revised 19,000 gain the prior month.

Art Hogan, chief market strategist at Jefferies, said the market largely has been ignoring constructive news, including the fact that the consensus number on the jobs report has moved up this week. "It's the most important piece of economic data we get every month. This time, we're throwing out a 5% correction even before the printed number comes out."

The monthly government jobs report has more leverage as a market catalyst than the ISM or ADP data. Economists don't doubt the jobs number's influence, even amid the negative trading sentiment in the equity markets, but were wondering just how good the printed number would have to be for the markets to rally.

The Jefferies economist thinks that due to the correction, the nonfarm payroll number may provide a credible opportunity for upside, and to shift the focus away from the euro.

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