The report comes as traders consider the latest economic dat...

The report comes as traders consider the latest economic data pointing to softening in the economy — and what it means for the Federal Reserve’s monetary policy decisions going forward.

ADP figures released Wednesday showed less private payroll growth than anticipated in June, while weekly jobless claims came in higher than economists forecast. On top of that, a reading of the service sector from the Institute for Supply Management unexpectedly indicated a contraction.

“Friday’s payroll report should help clarify the underlying strength of the labor market,” said Quincy Krosby, chief global strategist at LPL Financial. “Given other evidence of a cooling economic backdrop ... the payroll report could be increasingly decisive for the Fed as it seeks a rationale to signal an easing of rates.”

The three major indexes are on track to finish the holiday-shortened trading week up. The Nasdaq Composite and S&P 500 have climbed more than 2.5% and 1% in the week, respectively. Both closed at all-time highs and notched new intraday records on Wednesday.

The Dow has lagged this week, adding around 0.5%.