The US labour market report will be released on Friday at 14:30. The report, released on the first Friday of every month by the U.S. Bureau of Labor Statistics, includes several exchange rate-forming macroeconomic data.

The most closely watched data is the change in jobs excluding agriculture. Other macroeconomic data tracked are the unemployment rate, the underemployment rate, average hourly earnings, and the average workweek in hours.

Job creation

Based on a temporary increase in reported ticket spending, Bloomberg Economics estimates that the short-term effect of the release of a pair of "Barbenheimer" movies and the tour of singers Taylor Swift and Beyoncé boosted August employment.

According to Bloomberg, another positive effect will be an increase in employment among teachers. These two positive effects will likely cause a slowdown in job growth and show a weakening labor market after they subside.

On the other hand, a negative effect will be the collapse of transportation company Yellow Inc. Bloomberg estimates a negative effect of about 20,000 jobs, Bank of America estimates 30,000.Another negative effect expected by Bank of America (BofA) is seasonal effects in the health care industry. This has been a major driver of job growth, accounting for one-third of the increase in July, for example.

In addition, Bloomberg notes that hiring of highly skilled service workers is slowing.

Bank of America notes that if job change is below expectations, it could reduce the chances of a Fed rate hike. Its economists expect the U.S. to add 175k jobs.

Average hourly earnings

BofA expects month-over-month growth in average hourly earnings to grow at a slower pace than the past two months, when it grew at a rate of 0.4%. Specifically, it expects a growth rate of 0.3%. The bank defends its expectation by citing a reduction in wage inflation reported by Indeed Hiring Lab, which was 4.2% on a year-over-year basis.

However, BofA notes that the risk of higher-than-expected growth is higher than below-expectations. BofA speculates that if growth remains at 0.4% or more, it could strengthen the case for raising rates again as three-month annualized inflation would reach 5%.

Hours worked per week

BofA expects the length of the average workweek to remain unchanged at 34.3 hours. It notes, however, that in several sectors the number has fallen below pre-cancellation numbers. This, according to Bank of America, may indicate that companies are more willing to retain employees.

Context of other macroeconomic indicators

The labour market report comes after this week's macroeconomic data, which may give a clue as to what to expect.

JOLTS

Tuesday's JOLTS - the number of positions offered unexpectedly fell from 9.165 million (revised from 9.58 million) to 8.83 million. This number is lower than the most pessimistic analyst estimate of 9.1 million. The consensus was 9.47 million.

According to this report, the number of departures fell by 253,000 to 3.5 million. The number of departures in accommodation and food services fell by 166,000, in wholesale trade by 27,000 (the effect of the Yellow collapse) and in arts, entertainment and recreation services by 17,000. By contrast, the number of quits rose in government and public education by 18,000.Consumer Sentiment

The Conference Board reports that 40.3% of respondents said job offers are plentiful, compared to 43.7% who reported this in July. At the same time, 14.1% of respondents said that jobs are hard to find. This figure is up from 11.3% in July.

Job creation according to the ADP Research Institute

Wednesday's labor market report by ADP also surprised to the downside. According to ADP's methodology, job creation came in at only 177,000, against an analyst consensus of 195,000 and a previous reading of 324,000.

The main driver of the decline in job creation was the entertainment and hospitality sector. Job creation by hotels, restaurants and other employers in this sector fell by 30k, after several months of strong growth.

"This month's numbers are consistent with pre-pandemic job creation rates," wrote Nela Richardson, ADP's chief economist, adding: "After two years of extraordinary recovery-related gains, we are now moving toward more sustainable growth in wages and employment as the effects of the pandemic fade."

Unemployment claims

Initial jobless claims were reported today and came in better than the expected 235k, specifically 228k claims.

Challenger report

According to the Challenger report, U.S. employers laid off 75,151 workers in August, 217% more than a year ago. In July, according to this report, they laid off 23,697 workers.

"Job offers are down and Americans are now more reluctant to leave their jobs. The labor market is calming down after the pandemic and post-pandemic hiring frenzy," said Andrew Challenger, labor expert and senior vice president of Challenger, Gray & Christmas, Inc. "The increase in layoffs is not surprising given the technological disruption and the fact that companies are looking for ways to save money."

The Phillips Curve

J. Powell mentioned during a press conference in Jackson Hole last week that the Phillips curve may be steeper: "There is evidence that inflation has become more sensitive to labor market stresses than it has been in decades."

That said, even a small weakening in the labor market can have a big impact on lowering inflation. Economists at Bloomberg Economics agree, but add that measurement error plays a big role, noting that the Bureau of Labor Statistics last week revised the data for March 2022 to March 2023 down by more than 300,000 jobs.