In part because the March

employment report

was so soft, economists expect the April edition of the market-movingest economic indicator to be considerably more robust.

Don't remember the March jobs report? Relax. The

Labor Department

released it on

Good Friday, with the stock market closed and the bond market open for an abbreviated session.

The March report's four major components were as follows: 46,000 new nonfarm jobs, a 4.2% unemployment rate, a 0.2% gain in average hourly earnings and a 34.5-hour average workweek. In context, the average growth rate for nonfarm payrolls over the last 12 months is 230,000 a month; the unemployment rate sits at a 29-year low; the year-on-year growth rate of average hourly earnings moderated to 3.6%, its lowest pace since July 1997; and the workweek -- never mind the workweek. No clear trend there.

For April, economists surveyed by

Reuters

are looking for, on average, 230,000 new nonfarm jobs (in line with the trend), 4.2% unemployment, an 0.4% gain in average hourly earnings and a lengthening of the average workweek to 34.6 hours.

Forecasters expect job growth to rebound in April in large measure because the March report is assumed to have been distorted by the seasonal adjustment process, chiefly affecting the construction sector. Basically, economists think, unseasonably warm weather from December to February resulted in massive overcounts of construction workers, while unseasonably cold weather in March resulted in a massive undercount. Construction gained an average of 63,000 jobs a month from December to February, and lost 47,000 in March, according to the Labor Department's count.

"The sector least affected by seasonal factors, services, did well

in March, gaining 95,000 jobs -- about the same as the 110,000 monthly average for the prior three months,"

First Union

chief capital markets economist David Orr said in a published comment at the time. "That 'steady-as-she-goes' pattern is our bet on what actually happened in the jobs market in March." And what forecasters are betting on for April.

Market participants are divided over whether the Treasury market is likelier to rally in the event of a weaker-than-expected report or to languish in the event of a stronger-than-expected one. And

Fed

Chairman

Alan Greenspan

appeared to raise the stakes with his

remarks this morning. Some participants interpreted them as hinting that policymakers will adopt a bias in favor of a higher fed funds rate at its next meeting if the jobs data are exceptionally strong. The next meeting is May 18.

Others are more pessimistic about the prospects for a rally. "There's too much working against us," says Patrick Dimick, senior U.S. economist at

Warburg Dillon Read

. "Growth is too fast and the appeal is too great for

bonds other than Treasuries right now, making it an uphill battle for Treasuries."

"It's going to be an important test of market sentiment," says Richard Berner, chief U.S. economist at

Morgan Stanley Dean Witter

.

Beyond the headline number, bond market mavens will be looking to see what happens with manufacturing payrolls, which have contracted for 12 of the last 14 months, with one of the remaining two months coinciding with

General Motors

(GM) - Get Report

strikers returning to work

en masse

.

Dimick expects the narrowest loss of manufacturing jobs in seven months, and predicts that growth in manufacturing payrolls "will turn a lot of heads." In the last four months, key manufacturing indicators including the

Purchasing Managers Index

have rebounded sharply, and while the PMI employment index hasn't yet indicated that manufacturers are hiring again, a finding that they are "would validate what the

reports have been telling us" in a more general sense, Dimick says.

"All the manufacturing indicators seem to be aligning in the right direction for an improvement," Berner concurs.

As usual, the payrolls number will be the first item in the jobs report that traders look at. But economists say the average hourly earnings measure is a closer-than-usual second this time, because anxiety about the prospect of inflation has risen markedly in recent weeks. "Given how strong the growth numbers have been, the market is very concerned that inflation will start to pick up,"

Barclays Capital

senior economist Henry Willmore says.

An increase of 0.5% or more in average hourly earnings "would suggest that tight labor markets are producing a reacceleration of wage growth, and maybe that inflation expectations are starting to change on the part of the consumer," Morgan Stanley's Berner says.

But a strong increase in average hourly earnings could be offset by a couple of factors, economists say. First, if the increase is accompanied by significant payroll gains in manufacturing or construction or both, it may be seen as reflecting the fact that manufacturing and construction workers earn more than average. Also, Dimick notes that because last April, average hourly earnings surged 0.6%, the year-on-year rate won't rise unless there's an equally large increase this April. "It just tells you there may be a bit more tolerance

for a 0.4% rise than would otherwise be the case," he says.