NEW YORK ( TheStreet) -- Investors looking forward to exciting news from the September non-farm payrolls report on Friday may be disappointed. Most economists and analysts are expecting a performance similar to what happened last month with the private sector showing modest growth.

Private sector payrolls are expected to increase by 74,000, according to consensus estimates from Briefing.co,m after rising 67,000 in August. Estimates from economists polled by TheStreet ranged between an increase of 60,000 to 100,000. The overall unemployment rate is expected to tick up to 9.7% from 9.6%, though some experts do not rule out a higher rate as previously discouraged workers re-enter the workforce.

The market has been struggling for direction in recent days as the latest economic reports have sent conflicting signals on what to expect on the employment front.

On Wednesday, the ADP National Employment Report showed private sector jobs fell 39,000 against a projected increase of 18,000.. That was more or less in line with a Challenger Gray & Christmas report that showed September layoffs increased by 7% to 37,151.

On Thursday, the Labor Department said initial claims for the week ended Oct. 2 showed a surprise drop to 445,000 from 456,000 a week earlier.

Earlier in the week, the ISM nonmanufacturing data showed an improvement in both the index of new orders and employment, boosting hopes for more hiring in the sector that provides the most jobs in the economy.

However, the numbers did not provide a strong-enough signal, according to Brian Bethune of Global Insight. "I would like to see the services employment index go up higher," he said.

The lack of strong signals has led to largely modest expectations from the jobs report. Analysts expect the service sector to continue hiring, while the manufacturing sector is expected to show a slowdown. Construction will continue to be weak and would likely record a decline.

More job cuts may also be in store at the state and local level with the impact of the Census hiring fading away.

"Most states are now fighting huge deficits and we are going to start seeing steeper cuts," said Chris Low, economist at FTN Financial. "I expect 20,000 to 40,000 jobs cuts at the state and local level."

Low, says that recent indicators have shown that inventory restocking was "pretty much done" and that high unemployment is likely to persist in the near term.

"So far the recession has followed pretty close to the script of the recession we had in 2001. Once the stimulus faded, growth dropped. But then interest rates declined and we had a boom in mortgages. I do not think refinancing will happen this time. We will probably have sluggish economic growth with the unemployment rate going back to 10% or a stagnant rate if there is no job growth."

Despite the uninspiring outlook, markets may however not show an exaggerated reaction to the jobs number on Friday, unless there is a significant upside.

For one, the market is pricing in the Fed's second round of quantitative easing, which means that any weakness likely would be digested as a sign that the central bank will take further action to boost the economy.

Secondly, the markets are likely to be more focused on earnings, following Alcoa's ( AA) results on Thursday evening and reports from the big banks next week, according to Rick Fier, equities trader for Conifer Securities, which executes trades for over 150 hedge funds. Fier says his clients, mostly long-short equity funds, typically positioned their trades for non-farm payroll numbers but this time around they were more focused on earning and the elections.

Linda Duessel of Federated Investors also points out that September is historically a weak month of the job market and to the extent the market appreciates that, it would not react too adversely to a figure that comes in at the lower end of the range.

That said, the number would still be closely watched as job growth remains key to the economic recovery. "The Fed action is just a fast shot in the arm, driving commodities and asset prices up," she said. "An improvement in the employment situation will be so much better fundamentally."

--Written by Shanthi Venkataraman in New York

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