June jobs report preview: What could spook the markets?

When it comes to economic data, the big news this holiday-shortened week will be the June jobs report that will be released Friday morning.

Economists surveyed by Thomson Reuters forecast that the U.S. economy added 195,000 jobs in June while the unemployment rate is expected to hold steady at 3.8%, the lowest since April 2000.

The forecast for 195,000 is below the 223,000 jobs added in May, but above the three month average of 179,000 jobs added per month.

The number that could get the most attention is wages. Average annual earnings are expected to rise by 0.3% in June, which would translate to an annual growth rate of 2.8%. Of note, when annual wage growth rose to 2.9% in January, it sparked fears of inflation and higher interest rates, which sent the Dow Jones Industrial Average and the S&P 500 into correction territory.

The June jobs report comes during a holiday-shortened week, with U.S. equity trading closing early on Tuesday and remaining closed Wednesday in observance of Independence Day. As a result, with some traders opting to take the week off, volumes could be light. Thinner trading volumes are correlated with market volatility.