The Most Important Number for the Markets in Friday's Jobs Report

Here's my thought process ahead of the non-farm payrolls report due at 8:30 a.m. ET.

The first thing I'm really going to look at is the unemployment rate. There has been so much talk about the Sahm rule and reporters will focus on it so much at the September FOMC meeting that I think it is the most important number in today’s report for markets. I expect it to inch higher.

On the headline data itself, I would expect to see 120k-160k but mostly based on the fact that it has been coming in higher than ADP. In reality I think we could see a very small or even negative print. 

I think the seasonal adjustments gave too many jobs in Q1 and will not give enough jobs in Q3. (It's a wonky argument and based on how the seasonal adjustments are done). There is a chance the number could be strong, but with the annual revisions and string of monthly revisions, the market will not put much credence in a strong number.

Then I look for consistencies/inconsistencies.

Revisions.

Public vs. private sector jobs.

The household report.

Hours worked.

How much of the data come from birth/death model.

One wildcard will be earnings. Any inflation pressures there would be troubling as could cause the Fed to hold back.

As a whole I'm looking at the preponderance of data — including JOLTS and ADP and the various things listed above.