The Bureau of Labor Statistics is due to release its August employment report at 8:30 a.m. Friday, a data point that has taken on outsized importance after a private-payroll count and a run of weak government prints raised the odds the Federal Reserve holds interest rates steady at its meeting later this month.
Economists surveyed by Dow Jones expect the report to show nonfarm payrolls grew by roughly 53,000 to 58,000 in August, with unemployment holding at 4.1%, according to forecasts compiled ahead of the release. That would mark only a modest improvement after June and July combined showed a net loss of 3,000 jobs, including a 23,000 payroll decline in July that the Labor Department has already revised, alongside downward revisions to May and June totals of a combined 103,000.
The clearest recent signal came Wednesday, when payroll processor ADP reported that private employers added just 38,000 jobs in August, below the 47,000 economists had forecast and the weakest reading since January. Education and health services accounted for most of the gain, adding 45,000 positions, while manufacturing shed 17,000 jobs and professional and business services fell by 16,000. Companies with 500 or more workers drove nearly all of the hiring; firms with fewer than 50 employees added just 3,000 positions combined, according to ADP's breakdown of the report.
A pivotal reading for the Fed
The stakes extend well beyond one month's data. The Federal Reserve's rate-setting committee meets September 15-16 under new chair Kevin Warsh, who has signaled he wants to keep fighting inflation even as hiring cools. Traders have swung between pricing in a rate hike and a hold in recent weeks; a soft August report would likely reinforce bets that the Fed leaves rates unchanged, while a stronger-than-expected number could revive hike expectations.
Markets have already been trading on the uncertainty: the S&P 500 and Dow both rose more than 1% Thursday as investors positioned for the report, while the dollar slid to its lowest level since May. Vice President JD Vance has separately pressed the Fed to cut rates to ease housing costs, adding a political dimension to a decision the central bank insists it will make on the data alone. Whatever Friday's number shows, it will be the last full jobs report before the Fed's September meeting, and for a labor market that has now flirted with stagnation for three straight months, either a reassurance or a fresh warning sign heading into the fall.
