A jobs report on Friday will provide a key gauge of economic health as the United States weathers a surge of inflation<\/a> set off by the Iran war<\/a> seven months ago.<\/p>\n The fresh data is set to arrive weeks after the Federal Reserve imposed its first interest rate hike<\/a> in three years. The move aims to dial back price increases, but it risks an eventual slowdown in hiring as borrowing costs weigh on businesses.<\/p>\n The economy has shown signs of strain in recent months, including a bond selloff that threatens to raise consumer borrowing costs and a resurgence in oil and gasoline prices.<\/p>\n Consumer sentiment dropped<\/a> last month close to the lowest level ever recorded in the 74-year history of the University of Michigan’s survey.<\/p>\n Despite these headwinds, the labor market has proven sturdy so far this year — and such growth is expected to have continued in September.<\/p>\n Economists expect U.S. employers to have added 84,000 jobs in September, which would mark solid performance but a slowdown from 162,000 jobs added in August.<\/p>\n Federal Reserve Chairman Kevin Warsh speaks to reporters at the Federal Reserve in Washington, DC, September 16, 2026.<\/span><\/span><\/span><\/p>\n Jim Lo Scalzo\/EPA\/Shutterstock<\/span><\/p>\n<\/div>\n<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n The U.S. added an average of about 80,000 jobs per month over the first eight months of this year, financial services firm Raymond James<\/a> found in an analysis of Bureau of Labor Statistics data. That pace exceeded Raymond James’ expectations of 70,000 jobs added each month over that period.<\/p>\n The Iran war drove up gasoline prices and catapulted inflation to a three-year high. Inflation eased over the summer, but continued fighting has kept prices increases well above pre-war levels.<\/p>\n The annual inflation rate stands at 3.4% as of August, the most recent month on record, putting inflation more than a percentage point above the Fed’s target rate of 2%.<\/p>\n The combination of elevated inflation and a resilient labor market prompted the Fed to raise interest rates a quarter of a percentage point last month.<\/p>\n Investors peg the chances of another rate increase in October at one in three, meaning borrowing costs could rise further within weeks, according to CME Group\u2019s FedWatch Tool<\/a>, a measure of market sentiment.<\/p>\n “The plain fact is that inflation is too high and has been for too long,” Fed Chair Kevin Warsh said at a press conference in Washington, D.C., last month.<\/p>\n An increase to the benchmark interest rate raises borrowing costs for consumers and businesses, which in theory should slash inflation by slowing the economy and eating away at demand.<\/p>\n The policy risks a downshift in hiring and an uptick in the unemployment rate, though such fallout typically takes hold after a lag time lasting several months.<\/p>\n By some measures, the economy remains robust.<\/p>\n Gross domestic product grew over three months ending in June, defying fear of a downturn triggered by the Iran war. Consumer spending, which accounts for about two-thirds of U.S. economic activity, rose 0.6% in August from July, the largest monthly increase since March 2025, government data<\/a> on Wednesday showed.<\/p>\n<\/div>\n![\"Bureau](\"https:\/\/i.abcnewsfe.com\/a\/f7050446-6c27-4b07-a2e2-f2958fe27e41\/warsh-epa-jef-261001_1790875712062_hpEmbed_3x2.jpg?w=375 "\\"Bureau")
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