New data out Wednesday shows the U.S. economic recovery continues to struggle.
A report released by executive employment company Challenger, Gray & Christmas suggested that firms announced the largest number of planned job cuts in 16 months in July, climbing by 59 per cent from the same month a year earlier.
As well, the Commerce Department said U.S. factory orders for airplanes, autos and heavy machinery fell 0.8 per cent in June, reporting lower demand for factory goods for the second time in three months.
Adding to the gloom was a report on the U.S. service sector. The Institute for Supply Management's non-manufacturing index came in at 52.7, down from 53.3 in June and worse than the 53.8 reading that economists had expected.
"This represents the index's worst showing in over a year," TD Bank economist Chris Jones said in a commentary.
Markets watching Friday's jobs report
A component of the index that reflects new orders fell by 1.9 percentage points to 51.7, its lowest level since August 2009, leading Jones to worry that new orders are coming "dangerously close to breaching the 50 point threshold, below which signals negative growth."
But payroll processor ADP said that private U.S. companies added 114,000 jobs last month, slightly higher than Wall Street's expectations. It was the 20th straight month that small businesses added jobs.
Wednesday's data came after a weak manufacturing survey from the ISM on Monday and another report Tuesday which showed that Americans cut back on their spending in June for the first time in nearly two years.
Financial markets will be watching closely on Friday, when the U.S. government will announce job growth numbers for July.
"Given the recent history, most people would say, well if it's anything materially above 50,000, we would probably feel pretty good about it, given the blow to confidence that we have seen over the past couple of weeks," said Robert Gorman, chief portfolio strategist at TD Waterhouse.
"In the short term, as long as you have ambiguity around (the economy), we will see a lot of treading water at best, but I suspect it will be firmer as we get deeper into the year."
Canadian employment data also comes out on Friday.