US Jobs Report Seen Backing Warsh View: Steady Labor Market Supports Rate Hike Prospects

According to economists, US payrolls growth is expected to rebound in August after an unexpected dip in July. The Bureau of Labour Statistics' jobs report due this Friday is predicted to show a 55,000 increase in payrolls, which would be in line with the average job growth this year.

The unemployment rate, based on a survey of households rather than establishments, is seen holding steady at 4.1%. This stability in the labor market has been highlighted by Fed chairman Kevin Warsh as 'consistent with full employment', allowing the central bank to focus more intently on its battle with inflation.

The jobs report will be closely watched, especially after Warsh's hawkish comments at the US central bank's annual conference in Wyoming last week. These remarks raised the odds of a rate hike in September and changed how the coming week's data should be read.