Jobs Report Poses New Test for Warsh and the Fed

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Another jobs showdown

Stocks are trading just below recent highs, but investors are still on edge about the Fed.

The central bank’s next move on interest rates will become clearer after Friday morning’s jobs report, due at 8:30 a.m. Eastern.

Weak data from the Labor Department could buy the Fed and its chairman, Kevin Warsh, more time to stay on hold. But a hot number — especially if next week’s Consumer Price Index report is disappointingly high — could force the Fed to raise borrowing costs to combat persistently high inflation.

What to watch for:

• Economists polled by FactSet forecast that employers added 100,000 new jobs last month, up from 57,000 in June.

• The unemployment rate is expected to remain at 4.2 percent, per FactSet.

• Workers’ hourly earnings, a big focus for inflation hawks, are expected to have climbed 0.3 percent month over month.

Wall Street is divided about Friday’s report. A Reuters poll of economists sees 80,000 new jobs in July. But Adam Schickling, a senior economist at Vanguard, forecasts just 18,000 new hires, with “significant” downward revisions to previous months’ reports.

• One potential wrinkle: A World Cup hiring spree never materialized, which may signal weakness in the leisure and hospitality industry.

• New data from the New York Fed shows a lousy job market for recent university graduates.

Watch the bond markets. Bond holders drove up the yields on long-dated Treasury notes and bonds last week after Warsh’s news conference, worried that the Fed wasn’t sufficiently tackling inflation.

Article source: https://www.nytimes.com/2026/08/07/business/dealbook/jobs-warsh-fed-rates.html