What to watch: Can jobs report sway election?

7:24 AM, Nov 2, 2012   |    comments
New York Stock Exchange building/AP
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Wall Street investors and Main Street voters will get a final snapshot of the U.S. jobs market early Friday when the government reports how many new jobs were created in October. Economists estimate that 125,000 jobs were created and expect the unemployment rate to tick slightly higher to 7.9%. Last month, the economy created 114,000 jobs and the jobless rate fell sharply to 7.8% from 8.1%, surprising Wall Street.

The latest reading on jobs has political as well as financial and economic implications, says Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank. The jobs report "will allow us to understand the extent to which Corporate America has begun pulling back on hiring ahead of the much-publicized fiscal cliff," Cronk says. "The health of the economy is (also) Priority One for the U.S. electorate. This will be the last key data point for voters to digest."

A strong number will provide a positive storyline for President Obama heading into Tuesday's vote. A weak reading will give Republican Mitt Romney ammunition to argue that Obama's policies aren't working.

A batch of good jobs data arrived Thursday. Payroll processor ADP said a better-than-expected 158,000 private-sector jobs were created last month. Another report showed 9,000 fewer people filed for first-time jobless benefits last week. But that upbeat news clashes with a Challenger Gray & Christmas report showing planned job cuts by employers surged 41% last month.

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