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This coming Friday will bring the U.S. Employment Situation from the Labor Department. With significantly lower weekly jobless claims, with a semi-resolution to the fiscal cliff and to the debt ceiling, it might seem like the market may expect a better report this time around.

The Bloomberg consensus report for January unemployment by Bloomberg is 7.7%, which would be down from the 7.8% preliminary reading from December. Bloomberg also lists a private sector payrolls gain to 185,000 in January from 168,000 in December.

The stock market and bond market both key in off of the employment report and upon the expectations of future employment reports. After all, Ben Bernanke and the members of the FOMC have telegraphed that extremely accommodative interest rates will prevail until unemployment gets down to 6.5% and as long as the inflation expectation would not drift above 2.5% per year for more than six months.

Investors have to start expecting better employment reports. Without better jobs, the economic recovery is not going to regain steam. The world has its eyes on the U.S. for maintaining growth on its own right now. This is coming at a time when the S&P 500 is challenging 1,500 and when the DJIA is just shy of 14,000. We also have the 10-year Treasury note trying to get back above 2% after having been down under 1.70% just about a month ago. In the last month the yield on the 30-year Treasury Bond has risen to 3.16% from about 2.85% just 30 days ago.

Intermediate-term notes are rising in yield as well. The 5-year’s yield of 0.87% is up 16 basis points in 30 days and the 3-year’s yield of 0.43% is up from 0.34% just 30 days ago.

While all eyes will be on this Friday’s unemployment report, there are several reports that the market uses as previews for Friday’s big jobs report. We have the reports, wo issues them, and what the Bloomberg consensus is if available:

• Consumer Confidence from the Conference Board on Tuesday at 10:00 will give a jobs bias on the expectations component. Bloomberg’s estimate is 65.1 on the combined confidence report.
• Wednesday at 8:30 ADP Employment Report and the Bloomberg consensus is 172,000.
• The Challenger Jobs Cut report will come on Thursday at 7:30.
• Weekly Jobless Claims (Labor Department) is expected to be 350,000 but it was 330,000 last week.