The February jobs report is set for release Friday morning and is expected to show some signs of cooling after a robust month of job gains shocked Wall Street last month.

The monthly report from the Bureau of Labor Statistics, slated for release at 8:30 a.m. ET, is expected to show nonfarm payrolls rose by 200,000 in February while the unemployment rate remained flat at 3.7% from the previous month, according to consensus estimates compiled by Bloomberg. In January, the US economy added 353,000 jobs, the highest monthly total in a year, while the unemployment rate unexpectedly remained flat at 3.7%.

Here are the key numbers Wall Street will be looking at compared to the previous month, according to data from Bloomberg:

The report will serve as a test of whether January’s surprise pickup in job gains was a one-month outlier or a true sign of underlying strength in the labor market. Wages will also be in focus after a surprise pickup in wage growth in January raised inflationary concerns.

“After an overheated surge in January, we expect a cooler, but still solid, pace of job growth in February and expect the spike in earnings growth to be reversed. A report that is stronger than we forecasted would raise the risk that the first Federal Reserve rate cut comes later than May, which is currently our baseline,” Oxford Economics lead US economist Nancy Vanden Houten wrote in a note on Wednesday.

On Wednesday, Federal Reserve Chair Jerome Powell described the labor market as “relatively tight” but noted that “supply and demand conditions have continued to come into better balance” during his semi-annual testimony in front of lawmakers on Capitol Hill.

Recent data showed a mixed reading on wage growth. On Wednesday, the ADP Research Institute’s monthly pay insights report showed wage gains for people who changed jobs increased in February for the first time since November 2022.

ADP chief economist Nela Richardson told Yahoo Finance that this is noteworthy because wage gains for job changers are “most sensitive to current labor market activity.” Richardson added that the number shows the massive wage growth seen during the pandemic is “not going to bed quietly.”

Elsewhere on Wednesday, the latest JOLTS report showed job openings approaching a three-year low while confidence among workers appears to be ebbing.

“The decline in the quits rate is consistent with moderation in wage growth, which remains too rapid for the Fed,” wrote Vanden Houten.

“Most measures of annual wage growth are still running above 4%, higher than the roughly 3.5% pace that is consistent with 2% inflation, assuming trend productivity growth of about 1.5%. The Fed does not need to see wage growth at 3.5% or inflation at 2% to begin cutting rates but needs to be confident that those measures are on a sustainable path back to those targets.”

Markets will enter Friday’s report betting that the first Fed interest rate cut will come in June, per the CME FedWatch Tool. For the year, investors are pricing in a range of three to four rate cuts, per Bloomberg data.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

Bank of America US economist Michael Gapen wrote in a note to clients that if the February jobs report is in line with the firm’s projection for 215,000 job additions, it should “reduce fears of reacceleration [of inflation] and the risk that the Fed cannot ease policy this year.”

An in-line print, Gapen added, would likely mean “little change” for the current market pricing of rate cuts.

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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