Stock index futures edged higher on Friday as investors awaited a key report on the labor market to provide direction.

High unemployment remains a big hurdle to a sustainable recovery, and investors are anxious to see improvement. Conflicting reports through the week have caused sentiment to seesaw, with data showing private employers added more jobs than expected last month, but initial claims for jobless benefits unexpectedly rose last week.

Economists polled by Reuters expected the Labor Department report, due at 8:30 a.m. EDT, to show a drop of 65,000 in non-farm payrolls in July as temporary Census Bureau jobs evaporated. Private employers are expected to have added 90,000 jobs.

For a U.S. market that has really been struggling to produce macro data that convinces investors that there's more upside, this a very critically important macro data point today, said Craig Peckham, equity trading strategist at Jefferies & Co in New York.

I think it will go a long way to either sustaining some of the positive momentum conveyed during U.S. earnings season or forcing some second-guessing if it comes as a disappointment.

S&P 500 futures rose 1.9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 14 points, and Nasdaq 100 futures were up 4.25 points.

Stocks have been consolidating for most of the week after rising 10 percent since early July. But if Friday's employment data pushes the S&P 500 to close above its June high, charts show there's little to keep the benchmark from extending the summer rally.

The S&P has been closing in on its intraday June high of about 1,131, which would open the door for a strong gain as charts show little overhead resistance.

U.S.-listed shares of BP Plc added 1.7 percent to $41.25 in premarket trading. BP finished pumping cement into its ruptured oil well in the Gulf of Mexico on Thursday to seal off the source of the world's worst offshore spill, paving the way to permanently plug the blow-out later this month.

Shares of U.S. grain companies and others in the agriculture sector could be in focus after Russia halted grain exports as the country grapples with its most severe drought on record. Grain company Archer Daniels Midland Co was up 1.1 percent at $30.58 in light volume.

Kraft Foods Inc reported higher-than-expected quarterly profit and raised its target for cost savings from the acquisition of Cadbury. Its shares trading in Frankfurt were up 2 percent.

American International Group Inc's shares rose 3.4 percent to $41.34 after the company reported a quarterly loss, primarily caused by a $3.3 goodwill impairment charge. AIG is nearly 80 percent-owned by the U.S. government.

Activision Blizzard Inc shed 7.2 percent to $10.90 after it forecast its current-quarter profit and revenue to come in below Wall Street's targets.

Stocks edged lower Thursday as an unexpected rise in initial jobless claims and unimpressive July retail sales bruised sentiment.

(Editing by Padraic Cassidy)