Wall Street will get another chance to determine the U.S. labor market's state and the pressures it may exert on inflation when BLS releases two critical surveys this Friday.

Trading Economics estimates that the economy gained 310,000 jobs in August, below the 528,000 added in July. But it could still be a firm number, given the two-quarter decline in the Gross Domestic Product (GDP), and confirm that U.S. employment is still on an upward trend as it recovers from the pandemic recession.

A positive employment trend is good news for American households, as it means higher income and, eventually, higher spending, which could put the U.S. economy on a virtuous growth cycle. It's a good thing for Wall Street, too, as higher growth usually boosts the top and bottom lines of listed companies and, ultimately, their prices.

But a positive employment trend could be bad news for households, too, if job gains lead to a tighter labor market, feeding into inflation, already running at a 40-year high, and crushing family budgets. It could be bad for Wall Street, too, as higher inflation could force the Federal Reserve to be more aggressive in taking liquidity out of the economy by raising interest rates at a fast pace, which will lead to lower market valuations.

What could point to labor market tightness? Three numbers.

The first number is the unemployment rate. The lower it gets, the more difficult it is for businesses to find people to hire. However, Trading Economics expects the unemployment rate to come in at 3.5%, the same as in July, indicating that the tightness of the labor market remains the same in August as in July.

The second number is the labor force participation rate, the percentage of the labor force actively seeking a job, and a good indicator of the nation's labor supply. Trading Economics expects labor force participation to come in at 62.2%, slightly higher than the 62.1% but still below the 62.4% it was in March, indicating that supply pressures remain elevated.

The third number is hourly earnings growth, a good predictor of future inflation, as producers pass the higher labor cost on to consumers with price hikes. Trading Economics expects hourly earnings to grow at 5.1% in August, slightly below the 5.2% in July, meaning wage pressures eased slightly but remain elevated.

Geographic Solutions' Labor Economist Phillip Sprehe provides further insight on wage pressures across the economy. "Wages have grown across all major industries as the economy has recovered from the pandemic," he told International Business Times in an email. "However, since the higher inflation rates began in February 2021, only the Leisure & Hospitality industry wages have outpaced inflation. Overall salaries in the private sector declined by 4.2% since February last year after adjusting for inflation. Even with no monthly inflation in July, private wages were still down by nearly 1% over the last four months."

But Ryan Payne, President of Payne Capital Management, takes the opposite view, seeing wage pressures staying elevated in a tightening labor market. "Bottom line is the employment market is going to stay strong most likely," he told IBT in an email. "An acutely short labor supply means labor demand won't cool meaningfully anytime soon, keeping pressure on wages and prices. Therefore, we believe inflation is coming down from peak levels but will remain elevated."

A tractor trailer advertising job opportunities drives south on Route 81 in Virginia