WASHINGTON (MarketWatch) — Expectations are mounting that the December job report will be strong given a flurry of positive signals this week, economists said on the eve of the report.

“We’re optimistic we could see a decent number on Friday,” said Chris Low, chief economist at FTN Financial in New York.

Economists polled by MarketWatch are now expecting 175,000 nonfarm jobs created in December, up from 143,000 just a few days ago.

The unemployment rate is expected to remain steady at 9.8%. The Labor Department will release the data at 8:30 a.m. Eastern on Friday, and President Barack Obama will comment on the report from a Maryland manufacturing facility later in the day.

Many analysts lifted their estimates for job gains in the month after a record-breaking 297,000 increase in private sector jobs in December reported Wednesday from payroll firm Automatic Data Processing Inc and Macroeconomic Advisers. See ADP report.

For example, FTN’s Low said he doubled his December nonfarm payroll forecast to 200,000 from 100,000 after the ADP report was released.

Another factor leading analysts to expect a good job number has been a decline in initial claims for state unemployment insurance. See story on claims.

The strong showing of the ADP’s private-sector report, shown in the chart above, has led some economists to boost their expectations of the government’s nonfarm payrolls number.

Analysts said the “whisper number” among traders on Wall Street is somewhere north a 200,000 gain in jobs in December.

Not everyone has jumped on the bandwagon. A few economists are expressing skepticism about the ADP data. They note that the payroll data used by ADP goes through a seasonal quirk every December because that is the month that companies purge their payroll records of already laid-off workers.

Goldman Sachs economist Andrew Tilton said he was sticking with his estimate of a 100,000 net gain in payrolls in December.

“Most [indicators] still point to a gradual rather than an abrupt labor market acceleration,” Tilton wrote in a note to clients.

Low of FTN Financial credited the compromise in Washington to extend the Bush-era 2001 and 2003 tax cuts for the surge in employment in December.

The ADP surge was concentrated in small and medium-sized businesses. These firms were waiting for the uncertainty over taxes to end before hiring, Low said.

Of course, the ADP report is only on the private sector — the nonfarm payrolls report includes government workers, and the financial woes at the state and local level is expected to weigh on the broader report.

Steady improvement

Most of the high-frequency economic indicators have shown steady improvement in recent weeks, leading economists to raise their growth forecasts for the final three months of 2010 and 2011.

Economists think that growth accelerated in the fourth quarter to over 3% rate. The data will be released on Jan. 28.

Actually, the one fly in the ointment was the November unemployment report, which showed a disappointing 39,000 gain in nonfarm payroll and a spike in the unemployment rate.

Many economists think the November report was an aberration and predict the weakness will be revised away in the strong December data.

Robert Brusca, chief economist at FAO Economics, has revised his forecast for December payroll gain to 300,000 from 220,000.

“On balance there is not much reason to ignore the super strong labor market signals we are getting. There are a lot of them and they are clustered together,” Brusca said in an email.

Joel Naroff, president of Naroff Economic Advisers, has penciled in a increase around 225,000.

“The labor market is coming around,” Naroff wrote.

Analysts caution that the excitement over the December job report should be tempered by the reality that the improvement in the labor market from the deep recession is still expected to be extremely slow.

There were still 15.1 million persons unemployed in November.

That number could rise in the next few months as many job seekers re-enter the labor market.