For the past two years, the monthly nonfarm payrolls reading has taken a backseat to inflation readings as the key economic indicator for markets. But with inflation gradually coming off the boil and worries mounting over the labor market, the jobs report is getting its mojo back. In particular, this Friday’s reading could well be the most important economic data point of the year, as it is expected to go a long way in determining how soon and by how much the Federal Reserve starts lowering interest rates. “The August jobs report is crucial for Fed policy,” Aditya Bhave, senior U.S. economist at Bank of America Global Research, said in a client note. “Recent Fedspeak suggests that the Fed’s base case is that it would cut in 25 [basis point] increments. But a very weak August jobs report (e.g., sub-50k payroll growth and/or a further rise in the unemployment rate) would change the game by validating recession fears.” A basis point is 0.01%; a 25 basis point cut would be equal to a quarter percentage point. Markets are looking for a quarter-point move lower at the Sept. 17-18 Federal Open Market Committee policy meeting, while holding open a better than 1-in-3 chance for a half-point move. Economists surveyed by Dow Jones expect that nonfarm payrolls increased by 162,000 in August while the unemployment rate edged down to 4.2%. A gain of just 114,000 in July helped send the market into an early August tailspin from which it has almost recovered. While Bank of America is with the consensus of solid job gains and a quarter-point Federal Reserve interest rate cut, it sees two other potential scenarios: A slightly weaker-than-expected report that would push the Fed to ease a bit more than expected this year, and a “very weak” report showing only modest gains or even a loss that would spur policymakers to put half-point cuts on the table not only for September but also the remaining two meetings this year. Coincidentally, the Fed’s blackout period before the meeting would begin the day after the jobs report release, giving officials only a small window to signal their intention. The Fed under Chair Jerome Powell has avoided surprising markets. “Theoretically, we could go into the meeting with the market pricing more cuts than they deliver; but, historically, we have never seen the market go into a meeting pricing significantly fewer hikes than what Fed delivers,” Bhave said.