August jobs report set to be the 'pivotal' factor in the size of the Fed's coming interest rate cut

Josh Schafer • Reporter
Updated Thu, Sep 5, 2024 at 6:11 PM EDT • 4 min read

In This Article:
The highly anticipated August jobs report is expected to serve as the latest piece of economic data indicating that the US labor market is slowing down as investors ponder if further cooling could prompt a more significant interest rate cut from the Federal Reserve in less than two weeks.

The monthly report from the Bureau of Labor Statistics, slated for release at 8:30 a.m. ET on Friday, is expected to show nonfarm payrolls rose by 165,000 in August while the unemployment rate declined to 4.2%, according to consensus estimates compiled by Bloomberg.

In July, the labor report came in far weaker than expected. The US economy added just 114,000 jobs while economists had been expecting 175,000 job additions. Meanwhile, the unemployment rate unexpectedly rose to 4.3%. The combination sent Wall Street into its worst spiral of the year before it recovered throughout the rest of August.

Here are the key numbers Wall Street will be looking at on Friday morning compared to the previous month, according to data from Bloomberg:

• Nonfarm payrolls: +165,000 vs. +114,000 previously

• Unemployment rate: 4.2% vs. 4.3% previously

• Average hourly earnings, month over month: +0.3% vs. +0.2% previously

• Average hourly earnings, year over year: +3.7% vs. +3.6% previously

• Average weekly hours worked: 34.3 vs. 34.2 previously

The key question entering Friday's report will be whether the data from August confirms the cooling seen in July or shows that prior report overstated developing labor market weakness.

{snip}