Thursday brought on a slew of economic data ahead of Friday’s key unemployment and nonfarm payrolls data. The Labor Department and jobs watchers have some good news and some bad news to chew over after Wednesday’s negative gross domestic product and above-estimate ADP payrolls gain of close to 200,000.

For the month of December, personal income rose a sharp 2.6% and that was well above the 1.0% expected by Dow Jones. Spending was far lower, but it met expectations with a gain of only 0.2%.

Another key report was the Employment Cost Index, which is the measurement of total employee compensation costs when you consider wages and salaries as well as benefits paid by companies. This came in at 0.5% for the fourth quarter of 2012, which is right in line with estimates.

The Labor Department had some disappointing news on weekly jobless claims. This rose by some 38,000 to 368,000, versus the 365,000 expected by Dow Jones. Investors were getting used to seeing numbers closer to the 330,000 mark. We had two weeks in a row with low claims, and the prior week was the best reading we had seen in years. This may temper some of the great hope that was brought up by the ADP payrolls projection made on Wednesday ahead of Friday’s key employment report.

The Labor Department reports on continuing claims, the army of unemployed, with a one-week lag, and this rose marginally from 3.175 million to almost 3.2 million.

After a weaker-than-expected GDP and with government spending sequestration going into effect, any huge hope for employment gains may be a bit premature for Friday’s key employment report. Bloomberg is calling for unemployment to tick down to 7.7% in January from 7.8% in December. It also sees private sector payrolls rising to 185,000 from 168,000 in the prior month.

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