The August jobs report on Friday is expected to confirm the labor market is weakening.
Just by how much is what will matter to investors. It can’t be too slow, nor can it be too hot.
Wall Street is on edge heading into Friday’s nonfarm payrolls. Economists polled by Dow Jones are forecasting the U.S. economy added 75,000 jobs last month, a weak estimate that’s only slightly higher than the dismal 73,000 headline number in the July report. The unemployment rate is also projected to tick higher, to 4.3% from 4.2%.
Investors may be able to shrug off a soft report so long as the headline number manages to hit a sweet spot, one that is cool enough to justify a September rate cut, but not so weak as to add to recession fears. Adam Crisafulli of Vital Knowledge puts an “ideal” range that fulfills those two requirements between 70,000 and 95,000.
The August jobs report will also be heavily scrutinized for another reason. It will be the first after the poor jobs data and accompanying revisions last month prompted President Donald Trump to fire the U.S. Bureau of Labor Statistics commissioner. It’s a decision that has spurred fears of government overreach and cast doubt over federal economic data.
