The US economy appears to be on a knife’s edge, and Friday’s jobs report will be the deciding factor as to the next direction.
The August jobs report is expected to provide some much-needed clarity as to whether the labor market is slowing gracefully or spiraling quickly as was indicated by the recent weeks’ bleak batch of employment data.
“The next set of job numbers released this week will be among the most consequential in a while,” Tuan Nguyen, US economist at RSM US, wrote in commentary issued Wednesday.
Economists are expecting that the August report should reaffirm that the labor market is merely cooling versus outright weakening. Consensus estimates are for a net gain of 160,000 jobs, a solid increase from July’s estimated 114,000 gain, and for the unemployment to dip to 4.2%, according to FactSet estimates.
But forecasting is far from an exact science — especially since the pandemic threw all rules and data out of whack — so the official report could prove to be monumental in determining the health of not just the labor market but the economy as a whole.
