The market mood is so sour, a bad jobs number really couldn't make it feel that much worse.

AP

Traders have been bracing all week for another disappointing employment report, with hiring lower than the 75,000 jobs that economists expect were added in July.

The monthly employment report is the highlight Friday, when it is released at 8:30 a.m. It will land on stressed markets, heavily focused on the latest in the European debt drama and worried about the global economy. U.S. stocks suffered steep losses Thursday and  all major indices are in correction mode.

Economists expect the report to show the impact of government job cuts, and an increase of private sector hirings, close to the 114,000 level ADP reported in its survey earlier this week.

They also are watching for the  impact of corporate layoffs, which have been creeping up in recent weeks. Challenger Gray and Christmas reported the loss of 66,414 jobs in July, the highest number in 16 months.

Mesirow Financial Chief Economist Diane Swonk expects 50,000 jobs were added in total, when counting the loss of 25,000 public sector workers. Swonk said there are signs that manufacturing is picking up, but that the economy's soft patch has been worse than expected.

" We do know some of the job losses, particularly in manufacturing, were transitory, but the trajectory on growth is worrying. The cuts at the local (government) level are probably going to be a headwind, but they will abate in 2012 and when they abate, federal cutbacks will begin," she said.

Economists have been ratcheting down growth forecasts for the second half of the year, after a series of weaker than expected data.

" We're at stall speed. We have to have growth pick up . There are reasons I think it will pick up. Energy prices aren't as high as they were, and the things hit by the Japanese earth quakes should come back," she said.

The last two monthly jobs reports were very disappointing, showing flat growth. There were just 18,000 non farm payrolls in June, and 25,000 in May.