Most snapshots of economic performance come and go, flaring and disappearing like so many fireflies. Not so with Friday's U.S. jobs report. This one is the economic equivalent of a Roman candle.
For a few minutes at 8:30 a.m. ET economists, politicians, campaign strategists and journalists across the country will be riveted to the news coming out of the U.S. Department of Labour. That's when it announces how many jobs employers added in August and the official unemployment rate.
At least one wag has already dubbed it the "mother of all jobs reports." Here's why:
Timing. Here are the numbers to remember: 1, 6, 60. As in, the jobs data will arrive one day after President Barack Obama's prime time acceptance speech at the Democratic National Convention, six days before the U.S. Federal Reserve announces whether it will take new measures to perk up the economy, and 60 days ahead of the national election.
When Mr. Obama takes to the stage Thursday evening, political analysts expect him to argue that his policies made the best of a terrible economic situation – and that if voters stick with him, the country is headed for brighter days. A strong employment report would do much to buttress that argument, while a weak one undercuts it. (As one of the few government officials to get a sneak peak at the job numbers ahead of time, Mr. Obama may actually know the figures before his address on Thursday.)
Over at the Fed, chairman Ben Bernanke has already signalled that the central bank is ready to embark on fresh steps to stimulate the economy. If so, the coming meeting of the Fed's policy-making committee on Sept. 12-13 is the time to act. There's another such meeting in late October, but the Fed is unlikely to announce new measures so close to polling day, economists say, for fear of being accused of playing politics. Friday's employment report is the last, critical piece of the puzzle for the Fed to decide upon its strategy.
Trend. The most recent jobs report for July indicated some progress toward a faster pace of hiring. Employers added 163,000 jobs, the largest gain since February. However, economists don't believe that momentum continued into August. Instead, they predict that employers added 127,000 new jobs over the month, according to the median of estimates in a survey by Bloomberg. They're also expecting no change in the unemployment rate, which is now 8.3 per cent.
Friday's jobs report will contain figures for August as well as any revisions for prior months. It will be crucial in indicating whether hiring is moving into higher gear or whether it is shuffling forward in a way that satisfies no one.
Perception. While most American voters have already decided whom to vote for in November, a small minority remain on the fence. Statistics like the unemployment rate can make a big difference in their perception of the economy's overall direction. After Friday, two more employment reports remain before the election, including one just four days before voters head to the polls. But by then, most minds are made up.