Will Friday's jobs report offer a nice surprise?

The government reports its December numbers on payroll growth and unemployment Friday morning, and if a widely watched report on private-sector employment is any indication, the numbers may be better than expected.

The ADP National Employment Report estimated on Thursday that private-sector jobs grew by 215,000 in December. Analysts had expected an increase of 150,000.

ADP's data gave hope that the Labor Department will report that 150,000 jobs were added to the economy in December, maybe more. The national unemployment rate is expected to hold at 7.7%.

The Labor Department report will come out at 8:30 a.m. ET before U.S. financial markets open. Markets on Thursday were little changed on Thursday after a big rally on Monday and a huge rally on Wednesday that saw the Dow Jones industrials ($INDU) soar 308 points.

The Dow closed down 21 points to 13,391 on Thursday. The Standard & Poor's 500 Index ($INX) slipped 3 points to 1,459, and the Nasdaq Composite Index ($COMPX) was off 12 points to 3,101. ADP's numbers, developed with Moody's Analytics, argue that the job gains are coming from small business and, especially, medium-sized businesses.

The economy added 39,000 construction jobs, the report said. That reflects the ongoing rebound in housing. And some of the gain was due to rebuilding after Superstorm Sandy. Construction employment, especially residential construction employment, has been stagnant since the economy bottomed at the end of 2009.

Manufacturing lost 11,000 jobs. That reflects worries about Europe and the fiscal cliff battle in Washington.

Also seeing strength:

• Trade and transportation, 53,000 jobs.
• Finance: 14,000 jobs.
• Professional and business services: 37,000 jobs.

"The underlying economy has momentum, and the employment data confirms that. The hope and prayer of the market is that our political leaders don't screw it up," John Brady, managing director at R.J. O'Brien & Associates in Chicago, told Reuters.

The ADP report was controversial because it often produced results that were not seen in the Labor Department's report that comes out the first Friday of each month. The projections at the end and beginning of the year were quite volatile.

But ADP, one of the biggest payroll processors, worked on the methodology behind the report. It expanded the number of companies it surveys as well as the number of employees it samples. It is now believed that projections are based on a database that includes some 20% of private-sector employees.

There are several key pieces of Friday's report to watch for, including: 

• The alternative measure of unemployment. That accounts for people working part-time who can't get full-time work work, people who have dropped out of the work force as well as those who are measured. It was 14.4% in November.
• The unemployment rate for young people. The rate was 23.5% in November.
  
• The labor force participation rate. This was 63.6%, a level that was last seen in the 1980s recessions. You want it to move higher.
• The average work week. More is better. The work week was 34.4 hours in November, unchanged over November 2011.
  
• Average hourly wage. The average was $23.63 in November, up 4 cents from November. The average was up 1.7% over the prior 12 months. In other words, not much.

A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 372,000 last week. However, claims data for nine states, including California and Virginia, were estimated because of the Christmas and New Year holidays.

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