US Jobs, Inflation Data to Test Fed's Interest Rate Hike Timing

Markets are bracing themselves for a flurry of economic data releases in the coming days, including key jobs and inflation numbers from the US. The Federal Reserve's (Fed) decision to raise interest rates this month has added to the sense of uncertainty, with investors now weighing the possibility of another rate hike at its October meeting.

Economists expect US nonfarm payrolls to increase by around 90,000 in September, according to data due on October 2. The unemployment rate is forecast to hold steady at 4.1%, the lowest level in a year. Meanwhile, real personal spending, which excludes inflation, is projected to rise 0.5% from the previous month, marking the biggest gain in more than a year.

The combination of firm growth and mounting price pressure has increased the likelihood of further Fed tightening. Markets are giving greater weight to the possibility that the Fed could deliver another 0.25 percentage-point increase at its October meeting. This would come on top of the rate hike this month, which was itself a response to solid economic growth and inflationary pressures.