Here's What Friday's Jobs Data Could Do To Markets

On Friday, the United States is set to put out its August employment report, an economic release that markets will be watching closely.

The report itself is only a small piece of the overall picture of the U.S.' health, but the report is likely to make waves in the markets as recent turmoil has made investors increasingly sensitive. Most are expecting to see positive figures, with employers adding 220,000 jobs and the unemployment rate falling from 5.3 percent to 5.2 percent.

Fed Rates

One of the major reasons that traders are interested in this Friday's report is because of the U.S. Federal Reserve. Estimates regarding the bank's plans for a rate hike have been thrown off in recent weeks as markets wonder whether or not the slowdown in China and volatility in U.S. markets will cause the bank to push back its tightening plans.

Related Link: Indeed Chief Economist Tara Sinclair's View Of Friday's Jobs Report

Although many believe that the bank is no longer considering a September rate increase, some say that the jobs data could be enough to push the bank to move. A strong jobs report would add to the case for policy tightening, but most analysts believe that worries about inflation will keep the bank from raising rates until later in the year.

Stocks

Share markets are likely to make moves following the jobs report as well, though it is unclear as to how investors will take the news. While a strong jobs report would suggest that the economy is on the upswing, markets are likely to take that as bad news as it will encourage the Fed to raise rates sooner rather than later.

However, if the report falls in line with expectations or underwhelms, it may give markets a boost as it would provide another reason for the Fed to hold off on a rate hike.