THIS IS IT: We're hours away from the jobs report that could change the game for the Fed

We are finally here.

Friday is jobs day in America, with the Bureau of Labor Statistics set to release the August employment report at 8:30 a.m. ET.

Expectations are sky high for this report, which is the final major economic data point before the Federal Reserve decides whether or not to raise interest rates for the first time in 9 years at its September meeting.

Here's what Wall Street is expecting, via Bloomberg:

• Nonfarm payrolls: +217,000
• Unemployment rate: 5.2%
• Average hourly earnings, month-over-month: 0.2%
• Average hourly earnings, year-over-year: 2.1%
• Average weekly hours worked: 34.5

Since December 2008, the Fed has kept its benchmark interest rate near zero to support the economy following the financial crisis, the Federal Reserve has signaled that this year it expects conditions will be appropriate for a hike. But of course this decision all depends on what the data says.

What the Fed needs to see

In a note to clients on Thursday, Chris Rupkey at Bank of Tokyo-Mitsubishi wrote that Friday's jobs report needs to show these three things to keep a rate hike this month on the table:

• Payroll gains need to be close to the consensus estimate (a reading above 200,000 is widely considered strong).
• The unemployment rate must fall to 5.2% from 5.3% (it was actually quite close, at 5.261% in July).
• Wage growth needs to come in at the levels the market expects.

The flip side is that August tends to be a historically bad month for jobs, and has disappointed economists 78% of the time since 1988, according to Deutsche Bank's Joe LaVorgna.

Pointing to a strong jobs report, Wells Fargo senior economist Sam Bullard wrote in a client note Thursday that secondary labor market indicators still look good:

• Initial jobless claims have come in under 300,000 for 26 straight weeks.
• The ISM manufacturing and services indexes point to modest job gains.
• And, the Conference Board's labor differential, which measures survey respondents reporting that jobs are plentiful less those saying they're scarce, spiked in August.

"On a collective basis, we believe 'some' improvement will continue to be made on the labor front that will, in part, help justify a rate hike as early as the September FOMC meeting." Bullard wrote in a note to clients.

However, some economists think the Fed already has more than enough evidence to raise interest rates.

In a note to clients this week, Deutsche Bank's Torsten Sløk argued that the strength of the labor already indicates that, "if the Fed delays liftoff further the labor market will be overheated" before the Fed's current cycle of raising interest rates ends.

Has the Fed already made up its mind?

The jobs report is the most important barometer of the economy, and Friday's report could not come at a more volatile time for financial markets.

Currently, the market doesn't think the Fed will act, with the chances of a rate increase later this month standing at around 30%. The Minutes from the Fed's July meeting, released two weeks ago, suggested that the Fed didn't quite see an economy ready for higher interest rates.

Since that release, we've seen the stock market take a wild ride, including the Dow's stunning 1,000 loss in just minutes on August 24 - a move that was eventually reversed.

The stock market, of course, is not the economy. Last Friday, St Louis Fed president James Bullard told Bloomberg TV that although market volatility makes the Fed uneasy, it will not change their outlook "very much."

Speaking at the Jackson Hole economic symposium last Friday, Federal Reserve vice chair Stanley Fischer - believed to be the most influential FOMC member outside of chair Janet Yellen - said that it was too early to tell whether market volatility had impacted the Fed's ability to raise rates in September.

In a speech the following day, Fischer outlined that while inflation remains below the Fed's target, waiting to see inflation perk up before acting could put the Fed behind the curve. Additionally, Fischer said a number of factors are currently tamping down inflation (the Fed targets 2% inflation; inflation is currently running at around 1.2% annually, according to the Fed's preferred measure), and that he has reason to believe these will diminish over time.

And so while the Fed's latest Beige Book report of economic anecdotes acknowledged that it is seeing modest improvement in the economy, the question is whether this stock market volatility has already taken a September move completely off the table. The market thinks so, but Fed officials have been more coy. Friday will clear this up.