US jobs expected to rebound to 55,000 in August — But Warsh says Labor market is already at full employment

Economists, according to Bloomberg, expect Friday’s US jobs report from the Bureau of Labor Statistics to show employers adding about 55,000 workers during the month. That would put job growth roughly in line with the average pace seen so far in 2026. The unemployment rate, which is based on a survey of households rather than businesses, is expected to remain at 4.1%. 

US jobs growth seen picking up

The latest jobs numbers come at an important time for the Federal Reserve. A steady labour market, along with limited layoffs, is giving the central bank more room to focus on inflation.

Fed Chairman Kevin Warsh said Friday that steady demand for workers and low levels of layoffs are “consistent with full employment.” He made the comments at the US central bank’s annual conference in Wyoming. A stable jobs market has also helped support consumer spending and kept the wider US economy moving forward. 

But inflation remains a problem for the Fed. Price growth has stayed above the central bank’s 2% target for years, and officials are now paying closer attention to whether inflation is finally moving towards that goal. 

The jobs report will come at the end of a busy week for US economic data. The Bureau of Labor Statistics is also due to release its July job openings and labour turnover report on Tuesday. 

Warsh comments put September rate hike back in focus

Warsh’s recent comments have changed how investors are looking at the next set of economic data. His comments were seen as hawkish and pushed the chances of a September rate hike above 50%.

Bloomberg Economics said Warsh’s speech at Jackson Hole raised the odds of a September rate increase and could change how investors interpret the upcoming data. 

“Warsh’s hawkish Jackson Hole speech raised the odds of a rate hike in September, and changed how the coming week’s data should be read,” Bloomberg Economics said. According to the Economists, the August jobs report would still be the biggest release of the week, but a weaker-than-expected number may not carry as much weight as usual. 

They emphasised that Warsh described the labour market as being in good health and said slower job growth can sometimes be linked to demographic changes rather than a weakening economy. 

India growth expected to stay strong

India will release its second-quarter GDP figures on Monday. Growth is expected to slow slightly but remain strong at around 7.3%. Strong consumer spending and the services sector are expected to support the economy despite continued price pressures. 

Australia will also release GDP figures on Wednesday. Higher interest rates and a worsening housing downturn are expected to weigh on growth. 

China will start the week with its official manufacturing and non-manufacturing activity data on Monday. A wider set of August factory surveys will then come from Japan, South Korea, Indonesia, Malaysia, the Philippines, Thailand and Taiwan on Tuesday. 

Canada faces trade pressure

Canada also has an important week ahead. The Bank of Canada will announce its interest-rate decision on Wednesday, although no change is expected. 

International trade data will follow on Thursday, while Canada’s labour market figures are due on Friday. 

The bigger issue hanging over the Canadian economy is the worsening trade relationship with the US. Trade talks between the two countries have broken down badly, with new tariffs coming from both sides. There is currently no clear sign that negotiations will restart soon. 

Europe braces for faster inflation

Europe could see another rise in inflation pressure this week.

Euro-area inflation is expected to jump to 3.3% in August from a year earlier, according to the median forecast from 31 economists. If that happens, it would be the fastest pace since 2023 and could increase pressure on the European Central Bank to raise interest rates.

Recent figures from Spain and France have already added to those concerns. Spanish inflation rose to more than twice the ECB’s 2% target, while French inflation also came in higher than economists had expected.

Germany will release its inflation figures on Monday. Annual price growth is expected to reach 3.1%, which would be the fastest pace since early 2024.

Meanwhile, Turkey is expected to report second-quarter economic growth on Monday. The economy is forecast to have expanded 2.5% from a year earlier and 1% from the previous quarter, pointing to a recovery despite high interest rates.

Turkish inflation is expected to slow to 31.6% in August, according to forecasts, while monthly inflation could fall below 2%.

The figures come ahead of the central bank’s September 10 meeting, where policymakers could consider another cut in borrowing costs.

Israel’s central bank could also cut rates for a third straight meeting on Tuesday, taking its policy rate to 3.25%. However, some economists believe the bank may decide to wait.

Citigroup said that “in the absence of any urgency,” policymakers could choose to keep rates unchanged.

Asia watches rates, oil and tariffs

In Asia, central bank decisions in New Zealand and Malaysia will be closely watched as policymakers deal with the effects of the Middle East crisis, fresh tariff tensions and uneven economic growth across the region. 

The Reserve Bank of New Zealand could raise interest rates again on Wednesday as higher fuel costs continue to work their way through the economy. But weaker demand could make policymakers more cautious. Employment, retail sales and mortgage lending have all been softening. 

Malaysia’s central bank will announce its decision on Thursday and is expected to leave rates unchanged. The country has performed relatively well, helped by energy subsidies that have kept inflation under control. A strong artificial intelligence sector has also supported economic growth.