ADP's February employment count is up 140,000 which is right in line with Friday's consensus for a 150,000 rise in private payrolls. Such a rise would be moderate to solid and would not, as the text of ADP's report says, tip the scales for a Federal Reserve rate cut.

The problem is the report's predictive success which in January was not good, at a revised 111,000 gain versus the government's 317,000 jump. Another such robust gain in the government's measure could indeed tip the scales and push back expectations for a rate cut, at least as far as the financial markets are concerned. And December's number, up 158,000 versus the government's 278,000, also doesn't raise confidence in ADP's usefulness vis-à-vis the Bureau of Labor Statistics.

Forecasters see ADP's February employment number at 150,000. This would compare with January growth in private payrolls reported by the Bureau of Labor Statistics of 317,000. ADP's number for January was a distant 107,000.

The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.

Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.

The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.

By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.