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By Lewis Krauskopf
(Reuters) - The stakes are high for the monthly U.S. jobs report in the coming week, as investors gauge whether a string of worrisome data is signaling significant concern about the economy.
The benchmark S&P 500 stock index has pulled back 4% from its all-time high reached earlier this month, while falling Treasury yields and a slide in bitcoin are also indicating increasing investor wariness.
A number of recent economic releases have disappointed or weakened, including consumer confidence, business activity and retail sales. The Trump administration's dramatic moves on trade and other policies have injected uncertainty for consumers and businesses.
The monthly employment release is seen as among the most crucial data points assessing the economy's health and investors will be looking for the jobs data for February, due on March 7, to either bring relief or drive further worry.
"The market is on edge because of fears regarding a U.S. economic growth scare," Michael Arone, chief investment strategist for the U.S. SPDR Business at State Street Global Advisors. "If the unemployment figure shows signs of weakness, it further fuels the flames for that growth scare."
Employment in February is estimated to have increased by 133,000 jobs, according to a Reuters poll, compared to 143,000 in added jobs in January. The unemployment rate is expected to be 4.0%.
"The jobs market is the most important pillar of the U.S. economy," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. "Whether the consumer is in too much debt or whether they're going to spend is really going to come down to whether or not they have a job and they feel comfortable in their job."
Despite concerns about economic weakening, investors remain on guard about inflation, with the annual pace of inflation still running above the Federal Reserve's 2% target, so an overly strong jobs report also could spark market concerns.
"The street is hoping for a number that's not going to be too cool, too negative relative to expectations, or too hot, meaning that ... inflation might take longer than expected to normalize," said Angelo Kourkafas, senior investment strategist at Edward Jones.
In a possible silver lining for stocks, investors expect more monetary policy easing than they did earlier this month following the recent disappointing economic reports. Fed funds data indicate at least two more interest rate cuts expected by December, according to LSEG.