A jobs report on Friday is set to provide a key gauge of the United States economy as shoppers weather elevated inflation<\/a> and central bankers weigh a possible interest rate hike<\/a>.<\/p>\n The economy has shown additional signs of strain in recent weeks, including a bond selloff<\/a> that threatens to raise consumer borrowing costs and a rise in oil prices amid renewed fighting<\/a> between the U.S. and Iran.<\/p>\n The fresh government data is expected to show U.S. employers added 53,000 jobs in August, which would mark an uptick from an unexpected loss<\/a> of 23,000 jobs in July.<\/p>\n The unemployment rate is expected to remain at 4.1%, a low level by historical standards.<\/p>\n The labor market grew at a solid pace over the first half of 2026, despite a historic oil shock<\/a> that has driven up fuel prices and hiked supply-chain costs for a host of other goods.<\/p>\n The U.S. added an average of 92,000 jobs per month over the initial six months of this year, Bureau of Labor Statistics<\/a> data showed. That pace marks an improvement from an average of about 7,000 jobs lost per month over the second half of 2025.<\/p>\n The Iran war drove up gasoline prices and catapulted inflation to a three-year high in May. Inflation eased in June and July, but a burst of on-again, off-again fighting in recent weeks caused crude prices to rise again.<\/p>\n The annual inflation rate stands<\/a> at 3.4% as of July, the most recent month on record, putting inflation more than a percentage point above the Federal Reserve’s target rate of 2%.<\/p>\n Federal Reserve Chairman Kevin Warsh at the Jackson Hole Economic Symposium, Aug. 28, 2026, in Jackson Hole, Wyoming.<\/span><\/span><\/span><\/p>\n Natalie Behring\/Getty Images<\/span><\/p>\n<\/div>\n<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n The combination of elevated inflation and a fairly resilient labor market has raised the chances of an interest rate hike at the Fed’s meeting later this month, financial markets show.<\/p>\n Investors peg the odds of a quarter-point rate hike on Sept. 16 at about 50%, according to the CME Group’s FedWatch Tool<\/a>, a measure of market sentiment.<\/p>\n A rate increase could help fight inflation but the move risks a slowdown in hiring. Central bankers, in turn, may closely watch the jobs report for information on the sturdiness of the labor market.<\/p>\n The Fed opted to hold interest rates steady<\/a> at its most recent meeting in July, but central bankers appeared divided over the move. Three of the 12 members on the Fed’s policymaking board voted in favor of a rate hike, marking the largest number of dissenters casting ballots in the same direction since 2016.<\/p>\n Fed Chair Kevin Warsh, who took the helm of the central bank in May, said in recent days that it should prioritize fighting inflation.<\/p>\n “Inflation is running above our 2% target so the Fed’s predominant focus right now should be on prices,” Warsh said<\/a> in remarks last week at the Fed’s annual summer gathering in Jackson Hole, Wyoming.<\/p>\n “If the Fed gets inflation wrong and judges the economy wrong, who gets the worst of it? Not the financial high-fliers. Hard-working Americans are the ones left to deal with inflation that is too high or jobs that suddenly appear less secure,” Warsh added.<\/p>\n<\/div>\n![\"Bureau](\"https:\/\/i.abcnewsfe.com\/a\/d9cdf1c9-e4b4-41ce-a36e-57768810eee8\/warsh-gty-er-260903_1788461361066_hpEmbed_3x2.jpg?w=375 "\\"Bureau")
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