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Jobs Preview: Beyond the Headline

NEW YORK ( TheStreet) -- The Labor Department's highly-anticipated monthly jobs report, scheduled for release Friday at 8:30 a.m. EDT, will once again become the center of the economic data universe. Just don't get your hopes up when peeking at the headline figures, economists say. And after a week of tanking economic data on several fronts, a question exists whether Friday's jobs report will only extend lurking fears of a full-fledged economic pullback.

Because the government likely slashed anywhere between 225,000 to 275,000 temporary census jobs last month, the report will probably show employers broadly shed about 110,000 jobs from nonfarm payrolls in June, according to a forecast published by the Associated Press. That would mark the first negative month for jobs this year and will do absolutely nothing to combat the sinking economic sentiment percolating in the markets this week.

Meanwhile, the unemployment rate is expected to tick higher from 9.7% to 9.8%.

But all agree the key to Friday's jobs report won't be the headline numbers. Rather, market participants will instead focus keenly on the number of private sector jobs created (or not) in June. On that front, forecasters are looking for about 112,000 jobs to be added last month, The AP reported quoting a Thomson Reuters survey, after adding an underwhelming 41,000 positions in May.

"I think a market mover is getting private sector employment up over 150,000, or if it's somewhere 50,000 and below," said John Canally, economist at LPL Financial. "That being said, I think the market this week has priced in a lot of bad news on everything -- on Europe, on the U.S. economy, on risk of a double-dip. Because a lot of bad news is priced in, I think any market reaction you get to the downside might be limited a little bit. But I think a stronger number could illicit a stronger response because a lot of people are very pessimistic, very short the market.

Though he believes the market is over-discounting the risk of a double-dip, to his point, the week introduced a vast array of data points and global headlines that roiled stocks and commodities. On Tuesday, stocks collapsed under the weight of a Chinese leading indicators revision and dismal domestic consumer confidence figures.

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