The government will provide the latest snapshot of the labor market on Friday, revealing whether employers continue to back out of hiring and, if so, to what extent.
Forecasters surveyed by FactSet expect the Labor Department to report that US employers added about 250,000 jobs last month, in line with a modest slowdown from August’s gain of 315,000 jobs. That would likely be good news for Federal Reserve officials, who are raising interest rates in hopes of gradually cooling the labor market, and with it inflation, without a rise in unemployment.
Economists and policymakers are also monitoring two other pieces of data that will be included in the report: average hourly earnings, which have shown signs of slowing, and the labor force participation rate, which increased in August.
The Fed’s next rate decision is scheduled for November 2, and officials have stressed that the central bank will closely watch employment data to determine how aggressive it will be. The report is also the penultimate before the November midterm elections, and both parties will almost certainly use the data to show that they are the best managers of the economy.
There have been some recent signs that employers are reining in hiring. The number of vacant positions decreased in August to 10.1 million from 11.2 million in July. Unemployment applications last week he got up modestly.
But the labor market has persistently confounded economists, who have been forecasting a more steady slowdown for months. While there were signs that hiring was slowing in August, the July report showed a surprising acceleration.
“The job market has been a Ferrari for the last year and a half,” said Nick Bunker, director of North American economic research for careers site Indeed. “It’s slowing down, but it’s still moving very, very fast.”
Joanna Smialek contributed report.