Jobs Report, Inflation Data to Test US Rate Path

The US stock market has been holding steady near record levels, but investors are bracing for potentially negative news from upcoming reports on employment and inflation.

The monthly employment report, due out on October 2, is expected to show growth of 100,000 jobs and an unemployment rate of 4.2%, according to a Reuters poll of economists.

A good but not great payrolls report would likely be welcomed by the market, while a blowout jobs report could elicit a short-term negative reaction as it would cement the case for another rate hike in October.

The Federal Reserve hiked rates by a quarter percentage point on September 16 and signaled further increases before the year is out. Fed Funds futures suggest a greater than 60% chance of a hike at the next meeting in October.