The Bureau of Labor Statistics will close out a key week of jobs data Friday with its benchmark August employment report as investors parse through signals of a hiring slowdown and weakening wage growth heading into the autumn months.
Analysts expect the BLS to show that employers added a net new 170,000 jobs to the economy last month, down from the July estimate of 187,000 and likely the weakest tally in around three years.
Markets are likely to focus more on wage growth, however, following signals of a cooldown in higher from both ADP's National Employment report on Wednesday and data from the BLS's July Jolts report that showed job openings falling to the lowest levels since March of 2021.
The so-called quits rate, which tracks workers leaving their jobs voluntarily -- often for pay increases in another position -- slipped to 2.3% in July from 2.4% in June and 3% peak it hit at the start of last year.
Average hourly earnings for August are expected to rise 0.3% from last month, and 4.4% when compared to last year, with hours worked likely unchanged at 34.3.
A softer reading on wages, however, could provide further evidence to the Federal Reserve that its rate hikes are finally having an effect on the hot labor market, and trigger a potential pause in near-term increases as it monitors hiring and expansion over the coming months.
"We think that economic growth slows markedly in the fall and winter," said Ian Shepherdson of Pantheon Macroeconomics. "The lagged effect of the Fed’s rate hikes should work through, and the restarting of student loan payments will drain spending power from some 43 million people. If we’re right, hiring intentions will slow, and job growth will follow."
- Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
