Jobs report, labor participation, average hourly wages: 3 things to watch

Investing.com -- Stocks swooned on Thursday after stronger-than-expected jobs data revived fears that the Federal Reserve will continue to raise interest rates.

The Fed has already signaled it sees more rate hikes ahead as it works to combat inflation. Futures traders see rates rising another quarter of a percentage point when the Fed meets later in July.

Before then, the June jobs report on Friday and next week's report on consumer prices will give the Fed two key pieces of data as it makes its decision.

Stronger than expected private payroll numbers on Thursday from ADP is pointing out a still-strong labor market. That puts pressure on the Fed to continue to contain inflation, which still isn't back to its 2% goal. But investors fear that the Fed could tip the scale too far and push the economy into a recession.

Corporate earnings season kicks off in about a week, giving investors more insights from executives about the state of business and consumer spending and the outlook for the remainder of the year.

Here are three things that could affect markets tomorrow:

1. Jobs report

The nonfarm payroll report for June is expected out at 8:30 ET (12:30 GMT). Analysts expect the economy added 225,000 jobs in June, down from the previous month.

2. Labor participation rate

At the same time, the government's jobs report will show the labor participation rate for June. Analysts are expecting the reading to stay the same at 62.6%.

3. Average wages

Average hourly earnings are expected to rise 0.3% for the month and 4.2% for the year. The annualized number is a slight cooling from the previous reading.