US jobs growth forecast to have slowed again in August

Receive free employment news in the United States

we will send you myFT Daily Digest Email summary of the latest information US jobs Every morning there is news.

U.S. job growth is expected to slow in August, a further sign of a cooling in the world’s largest economy that will add to expectations that the Federal Reserve will hold off on further rate hikes this year.

Economists surveyed by Bloomberg forecast that the U.S. economy added 170,000 nonfarm jobs this month, which would be the third straight month of growth below 200,000.

Investors and policymakers are watching for signs of a slowdown in the U.S. labor market, as job and wage growth are key factors in inflation.

The Bureau of Labor Statistics will release the latest official data at 8:30 ET on Friday.

While headline growth data is expected to slow, the unemployment rate is expected to hold steady near a multi-decade low of 3.5%.

Average hourly earnings are expected to rise by 0.3% month-on-month and 4.3% year-on-year, a slight decline from the previous month, but well above the Fed’s 2% inflation target.

Inflation has fallen sharply from a peak of more than 9% last year, with headline consumer price inflation running at 3.2% in July.

However, economists have warned that continued strength in the labor market could make it difficult to close the remaining gap to meet the Fed’s inflation target.

Citi economists Andrew Hollenhorst and Veronica Clark noted earlier this week: “The resilience of the labor market has been one of the most obvious risks to a sustained moderation in inflation. “Most officials (expect) that even in an ideal ‘soft landing’ scenario, the labor market will relax somewhat and unemployment will rise.”

Separate data earlier in the week showed labor demand was slowing, with the number of job vacancies falling more than expected.

Investors overwhelmingly expect the central bank to keep rates steady at its next meeting in late September, but the outlook for the rest of the year is less certain. Futures markets are pricing in a slightly less than 50% chance of a rate hike before the next meeting in November.

Fed Chairman Jay Powell, in his annual speech last week at the Fed’s economic symposium in Jackson Hole, Wyoming, stressed that the central bank was “ready to raise rates further as appropriate,” but said policymakers were trying to balance controlling inflation. The process will be done with caution to minimize damage to the overall economy.