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Friday morning will bring the Employment Situation report from the Bureau of Labor Statistics. This number is perhaps the most widely followed for the overall strength of the jobs economy, with economists, investors, business owners and workers all paying attention. The jobs report can also have a great impact on the markets.

The current trend has been for strong payrolls gains and a low unemployment rate that is well under the historical natural full employment rate many have learned about years ago. We are also at a time where labor price pressures have been building and all the regional Federal Reserve reports and private business reports (PMI, ISM, etc.) are calling for wage pressure and input prices pressure to persist at this time.

As far as what to expect for Friday at 8:30 Eastern Time, it is important to look back at what has been released this week and what the formal estimates are from major news wires.

ADP reported that March’s payrolls from its own client forecasts were up 241,000 in March. The report was far stronger than the 185,000 expected by Bloomberg, and this was higher than the range of 110,000 to 225,000. ADP noted on CNBC that the pooling is a different source and that the labor market was about to run into serious shortfalls. That said, ADP noted how the sourcing changes could still let the official government number for nonfarm payrolls be under 200,000, and that’s where economist expectations are for March.

A combined ADP quote and Moody’s Analytics quote said:

We saw impressive momentum in the first quarter of 2018 with more jobs added per month on average than in 2017. Midsized businesses added nearly half of all jobs this month, the best growth this segment has seen since the fall of 2014. The manufacturing industry also performed well, with its strongest increase in more than three years… The job market is rip-roaring. Monthly job growth remains firmly over 200,000, double the pace of labor force growth. The tight labor market continues to tighten.

The preliminary numbers prior to revisions for February were 4.1% in unemployment, 313,000 in nonfarm payrolls and 287,000 in private sector payrolls.

Friday’s actual consensus estimates for the Labor Department data are seen as follows:

• Unemployment: Bloomberg and Dow Jones both at 4.0%
• Nonfarm payrolls: Dow Jones at 178,000 and Bloomberg at 175,000
• Private sector payrolls: Bloomberg at 175,000 and Dow Jones estimate not available
• Average hourly earnings: Bloomberg at +0.3% and Dow Jones at +0.2%

One key issue to watch will be the year-over-year average hourly earnings. This came in at a gain of 2.6% at $26.75 in February. Bloomberg’s year-on-year forecast is 2.7%.

Other issues that are less watched by the markets were reported as follows in February:

• Average workweek: 34.5 hours
• Laborforce participation rate: 63.0%

The National Federation of Independent Business (NFIB) also reported on Thursday that a net 20% of small business owners reported job creation plans in March. That is up 2 points and remains at a historically high level. The NFIB also showed that a net 33% of business owners reported raising compensation. Those wage hikes are said to be in response to the tight labor market and are shown to be at the highest reading since November 2000. That report said:

Businesses hiring or trying to hire rose one point to 53 percent, but 47 percent reported few or no qualified workers. In addition, 21 percent of owners cited difficulty finding qualified workers as their Single Most Important Business Problem, down one point from February. Thirty-five percent of all owners reported job openings they could not fill in the current period…

Friday’s report could be a major market mover, and the ADP report and other outside reports should have set the tone for an above-consensus payrolls report followed by strong hourly wage growth.