The August jobs report is set for release Friday morning and should show growth in the US labor market continued to slow.
The monthly labor report from the BLS is set for release at 8:30 a.m. ET and is expected show nonfarm payrolls in August rose by 170,000 while the unemployment rate remains steady at 3.5%, according to consensus estimates compiled by Bloomberg. In July, the US economy added 187,000 jobs while unemployment ticked down to 3.5%.
Here are the key numbers Wall Street will be looking at, according to data from Bloomberg:
Nonfarm payrolls: +170,000 vs. 187,000 previously
Unemployment rate: 3.5% vs. 3.5% previously
Average hourly earnings, month-on-month: +0.3% +0.4% previously
Average hourly earnings, year-on-year: +4.3% +4.4% previously
Average weekly hours worked: 34.3
"Big data indicators indicate solid but generally slowing job growth, and August payrolls have exhibited a negative bias in the initial prints (subsequently revised higher in each of the last the last five years)," Goldman Sachs chief economist Jan Hatzius wrote in a note ahead of the report. "Our forecast also embeds a 26K one-time drag from the combination of Hollywood worker strikes (-18K) and Yellow trucking layoffs (-8K)."
Last week, Fed Chair Jerome Powell described the labor market's rebalancing as "incomplete." Powell has repeatedly noted that getting inflation back down to the Fed's 2% goal will require "some softening in labor market conditions."
"We expect this labor market rebalancing to continue," Powell said in a speech at the Jackson Hole Economic Symposium. "Evidence that the tightness in the labor market is no longer easing could also call for a monetary policy response."
Since Powell's speech, early signs from other economic data have hinted that the US economy may be cooling off after a stronger than expected summer.
New data from ADP released Wednesday showed private employers added 177,000 jobs in August, a significant slowdown from the 371,000 jobs added in July. On Tuesday, the latest Job Opening and Labor Turnover Survey, or JOLTS report, showed job openings in July fell below 9 million for the first time in more than two years. To top it off, a consumer confidence survey revealed Americans are feeling more wary about the labor market.
All of those data points came in softer than economists surveyed by Bloomberg had expected and has pushed bets that the Federal Reserve holds rates steady at its September meeting higher. Markets are pricing in a nearly 90% chance the Fed doesn't rise rates at its next meeting, up from a 78% chance on Monday.
"Along with other signs of loosening labor market conditions, an August jobs report in line with expectations will allow the Fed to hold interest rates steady at the September 20 policy meeting," Oxford Economics lead US economist Nancy Vanden Houten wrote on Wednesday.
Josh Schafer is a reporter for Yahoo Finance.
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