2 days ago
US Jobs Expected to Rebound as Rate Hike Debate Intensifies
The United States is expected to have a better jobs report in August than it did in July.
Economists think companies may add about 55,000 workers.
They expect the unemployment rate to stay at 4.1%.
Kevin Warsh, a Federal Reserve leader, said the job market looks healthy enough to be considered fully employed.
This could give the Federal Reserve more time to focus on inflation.
However, Warsh’s comments also made investors think a US interest-rate increase could happen in September.
Other countries will release information about their economies and prices this week.
Europe may see inflation rise, while Canada faces trade problems with the United States.
Central banks in several countries must decide whether to raise, lower or keep interest rates unchanged.
Economists expect US employers to add about 55,000 workers in August, with unemployment holding at 4.1%.
Federal Reserve Chairman Kevin Warsh said steady worker demand and limited layoffs are consistent with full employment.
Warsh’s hawkish comments pushed the implied probability of a September rate hike above 50%.
Euro-area inflation is forecast to rise to 3.3% in August, increasing pressure on the European Central Bank.
Central banks and governments worldwide will also assess growth, tariffs, oil prices and inflation this week.
- Who
- US employers, economists, the Federal Reserve and central banks worldwide.
- What
- The United States is expected to report a rebound in August hiring, while countries release economic data and make interest-rate decisions.
- Where
- The United States, Europe, Canada, India, Australia, China, Turkey, Israel and several Asia-Pacific economies.
- When
- The US jobs report is due Friday; other economic releases and central-bank decisions are scheduled throughout the week.
- Why
- The data will help policymakers assess employment, inflation, growth, tariffs and the direction of interest rates.
Rate-Hike Case
Rate-Caution Case
US monetary policy
Rate-Hike Case
Kevin Warsh’s comments and persistent inflation have increased expectations of a September US rate hike.
Rate-Caution Case
A weaker-than-expected jobs report, softening demand and limited layoffs could argue for caution, although Bloomberg Economics said weak hiring may receive less weight after Warsh’s speech.
New Zealand interest rates
Rate-Hike Case
The Reserve Bank of New Zealand could raise rates again as higher fuel costs pass through to the economy.
Rate-Caution Case
Weaker demand, employment, retail sales and mortgage lending could make policymakers more cautious.
European interest rates
Rate-Hike Case
Forecast inflation of 3.3%, along with higher-than-expected figures from Spain and France, could increase pressure on the European Central Bank to raise rates.
Rate-Caution Case
The article does not give a specific opposing ECB forecast, but the inflation outlook remains a forecast rather than a confirmed outcome.
Key facts
- Expected August US job growth
- About 55,000 positions, according to economists surveyed by Bloomberg.
- Expected US unemployment rate
- 4.1%, unchanged from the previous reading.
- Federal Reserve assessment
- Kevin Warsh said steady worker demand and limited layoffs are consistent with full employment.
- September US rate-hike probability
- Above 50% after Warsh’s hawkish comments, according to the article.
- Expected euro-area inflation
- 3.3% year over year in August, the fastest pace since 2023 if the forecast is correct.
- Expected India growth
- About 7.3% in the second quarter.
- Expected Turkish inflation
- 31.6% in August, according to forecasts.
- Bank of Canada decision
- No interest-rate change is expected on Wednesday.
Quotes
Bloomberg Economics
Economic analysis organization assessing the market implications of Warsh’s speech
“Warsh’s hawkish Jackson Hole speech raised the odds of a rate hike in September, and changed how the coming week’s data should be read”
financialexpress.com
“consistent with full employment”
financialexpress.com
Sources
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