Economists expect a rebound in August with roughly 55,000 nonfarm payroll additions, following the unexpected loss of 23,000 jobs in July. The unemployment rate is expected to hold steady at 4.1%, a level Fed Chair Kevin Warsh described as consistent with full employment during his Jackson Hole remarks. Inflation remains elevated, with headline PCE at 3.7% and core PCE at 3.3%, both well above the Fed’s 2% target. The federal funds rate currently sits in the 3.50% to 3.75% range. A solid August payroll number would tilt the balance toward the hawkish scenario, with bond yields and the dollar likely moving higher.
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