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Monthly U.S. employment data set to be released Friday will give hints to how big of cuts the Federal Reserve will make to interest rates in a few weeks, Bloomberg reports.
After the release of the July jobs report last month showed a rise in the unemployment rate to a level that triggered a popular recession indicator, investors were concerned that the economy may be on the brink of a downturn.
Stocks have since rebounded, and forecasters expect the report for August to show a bounce in hiring alongside a downtick in unemployment after four straight months of increases. But Fed Chair Jerome Powell said last month that the central bank is now more concerned about risks to the labor market than inflation, and another bad report would bolster the case for an outsize rate cut.
“The jobs report is always one of the more important monthly economic indicators in the US, but its relevance is certainly elevated,” says Sal Guatieri, senior economist at BMO Capital Markets. “A lot of focus will be on certainly the next jobs report—but also future jobs reports—in determining the Fed’s policy actions.”
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