The major economic data to be released this week will be the September U.S. jobs report on Friday.
We expect a net increase in total employment of 85,000 positions following the gain of 162,000 in August. We expect the unemployment rate will remain unchanged at 4.1%.
Average hourly earnings should increase by 0.3% month over month and by 3.2% on a year-ago basis.
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With inflation rearing its ugly head once again, one focus will be on real wages in contrast with the nominal numbers reported in the monthly jobs data.
Because we are expecting the September consumer price index to show inflation at or above 4% when it is released on Oct. 14, aggregate hours worked in the September jobs data will most likely provide an indication of whether household consumption will slow into the holiday shopping season.
We anticipate that construction jobs linked to the AI data center build-out as well as skilled trades should show solid hiring, while health care, hospitality and retail will all show a slower pace of hiring.
We think there is modest risk of a stronger monthly number than implied by our forecast.
The takeaway
The two primary takeaways from the jobs report are that the low-fire, slow-hire employment framework remains unchanged and that there will be little to alter the emerging rate hike bias of an economy at or near full employment.