U.S. stock futures struggled for direction on Friday, with investors striking a cautiously optimistic tone ahead of the top-tier jobs data for June, hoped to show a rebound from May's lackluster report.
Futures for the Dow Jones Industrial Average climbed 36 points, or 0.2%, to 17,854, while those for the S&P 500 index gained 5 points, or 0.2%, to 2,097. Futures for the Nasdaq 100 index slipped 7.50 points, or 0.2%, to 4,459.75.
"Another payroll Friday is upon us, and one which would have been a long awaited event had Brexit not intervened. It's still important, as it was only last month (it seems a lifetime ago) that we saw the shock 38,000 print relative to 160,000 expectations," analysts at Deutsche Bank said in a note.
The nonfarm payrolls report is due at 8:30 a.m. Eastern Time, and is expected to show that 170,000 new jobs were added in June, according to economists polled by MarketWatch.
At Deutsche Bank, the estimate, however, was a bit more pessimistic, with a forecast of 155,000. If that number holds true, the three-month average would drop to 105,000 from 116,000 previously and mark a significant downturn compared to 2015's average of 229,000, the bank said. "The big question would be whether this means full employment is approaching and higher wages are round the corner, or whether it reflects companies scaling down hiring as profit margins get squeezed," the Deutsche Bank analysts added.
Average hourly earnings are forecast to have risen 0.2% in June, the same rate as in May. The unemployment rate is seen as inching up to 4.8% from 4.7%.
The Federal Reserve is watching the jobs market closely in determining when to next raise interest rates. Wages are seen as a key measure for the central bank's analysis, as rising salaries could help bring inflation closer to target and thus justify a rate increase. However, after May's disappointing report and the Brexit backlash, expectations for a rate hike have been pushed further out. According to the CME Fed Watch Tool, investors are currently not pricing in a rate hike this year.