That is the main focus of markets today and for the most part has been the key risk event that everyone has been waiting for this week. Here's a couple of things to wrap your head around before we get to that:
What does the estimates say?
July saw a surprise beat of +528K but the headline figure is estimated to fall to +300K this time around. The unemployment rate is expected to keep steady at 3.5% but keep your eyes out on wages data as that will also play into inflation "stickiness" or at least some form of interpretation of sorts.
"Cool off"
Be wary though that the White House has warned that employment is going to "cool off" heading into today's report. What exactly that means, whether matching estimates of a softer number than July or a downside miss, is still up for interpretation. That said, this sort of ties with the next point:
What can we expect?
Adam had a good preview post here and why the figures are likely to disappoint, no matter what the employment numbers coming into today might have said during the course of the week. It might be a seasonal thing but last August, there was a big disappointment in the numbers as well here. Could this be what the White House is alluding to when they say "cool off"?
How will this impact markets?
It's going to be yet another case of when bad news is good news; vice versa. A strong set of numbers will reaffirm the recent Fed hawkishness and keep the dollar underpinned, while likely weighing on equities further - despite the stirring comeback yesterday. Meanwhile, a decent miss is reason enough for investors to push back and may provide some short-term relief for stocks while seeing the dollar pull back from recent highs.
A lot hangs in the balance with USD/JPY looking to keep a break above 140.00 and the S&P 500 looking to steer the recent downside momentum away from a look at the June lows.
In any case, this report won't be the make or break ahead of the FOMC meeting later this month. The key one to watch will be the US CPI data release on 13 September. If Jackson Hole was the flop, today will feature the turn and we will get to the river in two weeks' time.