Jobs Report Preview: Resist the Urge to Panic on Weakness Says Wilkinson

Just four weeks after a hard fought election and a jobs report that saw the unemployment rate holding below 8% for a second straight month, investors are preparing to hear about the labor market all over again tomorrow.

Officially, economists are looking for hiring to stall to just 80,000 new jobs from the 171,000 figure generated in October. Unofficially, many market observers will tell you they don't know what to expect given the growing attention on the so-called fiscal cliff over the past month, as well as the disruptions and power outages Hurricane Sandy inflicted, particularly in the Northeast. The November non-farm payroll data will be released at 8:30 a.m. EST on Friday.

According to Andrew Wilkinson, chief economic strategist at Miller Tabak, investors should expect a good number, but resist the urge to panic if it's noisy and bad.

"The background to this report is that we've seen quite a substantial pickup in the pace of hiring," Wilkinson says in the attached video. "The three-month average gain is about 170,000, and that's pretty good." As for his own estimate, he's expecting a number closer to 125,000.

Why is he so optimistic? Because he says the New York-New Jersey region accounts for about 10% of GDP, and that Sandy, ultimately, was a regional problem. "Just because the storm hit the Northeast, that doesn't necessarily affect conditions nationwide," he says.

That's not to say there will be no effect, but his bet is that it will be less than many expect. And even if he's wrong and the number comes in light, it probably won't markedly alter his overall jobs thesis.

"So the pace of hiring has definitely picked up," he says, taking comfort in the fact that it "has been concentrated in three of the largest job creation areas," including professional business hiring, education and health, and leisure and hospitality. "I find that very encouraging."

As much as stocks, bonds, currencies and commodities are all particularly vulnerable to the critical jobs data point, Wilkinson thinks it's going to be a big one for Ben Bernanke too. "This is the most important, because this is what Fed policy hinges on" he says, in a not-so-subtle reminder that the central bank's rate-setting panel will hold its final meeting of the year next week.