As if trying to predict the monthly payrolls number wasn't difficult enough, getting September's number correct is almost a lost cause.

The Bloomberg consensus estimate predicts that 150,000 jobs were lost last month, following the creation of 169,000 new jobs in August. The range of estimates is extremely wide, with economists figuring that as few as 25,000 to as many as 350,000 jobs disappeared. The unemployment rate is expected to rise to 5.1% from 4.9%.

"I am expecting a decline of 169,000 jobs but the real question is what is the underlying job growth ex-Katrina," said Michael Gregory, senior economist at Harris Nesbitt. "The changes the Bureau of Labor Statistics has implemented and the strike that occurred at Boeing during the survey week may overestimate September's job losses."

Hurricanes Katrina and Rita, which battered the Gulf Coast recently, left thousands unemployed in Louisiana, Mississippi and elsewhere. Katrina itself, the first of the two storms, destroyed businesses and pushed energy to record prices, and the wide range of forecasts for lost jobs shows that many economists are having a difficult time determining the impact of the storms.

The Labor Department has made changes to the normal payroll survey to account for the Gulf Coast devastation. For instance, according to the Bureau of Labor Statistics Web site:
If there are sample units that BLS is unable to contact in the most heavily impacted disaster areas, the Current Employment Statistics survey will assume the business is not operating and therefore has an employment level of zero. This carries some risk of overstating employment loss.

However, if CES follows its usual imputation procedure for non-respondents, all non-responding units in these areas would have the over-the-month change trend of all other sample units in the estimation cell assigned to them. This assumption, given the present circumstances in the affected areas, is unlikely to be true, and, therefore, following standard imputation procedure would carry a strong risk of understating employment loss.

Traders have seen a mixed bag of economic releases and a handful of companies warning of profit shortfalls heading into the number Friday. Investors were finally seeing the effects of higher energy prices on some companies.

Wendy's ( WEN) said third-quarter same-store sales fell 5% in the U.S. The restaurant operator said same-store sales were hurt by store closings after Hurricanes Katrina and Rita, high gasoline prices and lower consumer spending.

Clorox ( CLX) lowered its earnings forecast for the second quarter to a range of 41 cents to 47 cents a share from its previous outlook of 50 cents to 57 cents a share. The company also cut its full-year earnings forecast, citing rising energy costs.

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