A “Now Hiring” sign is displayed in front of a recruiter speaking to a job applicant at the WorkSource North Seattle Career Fair on Tuesday, February 10, 2026 in Seattle, Washington, USA.
David Ryder Bloomberg | Getty Images
The August jobs report, to be released on Friday, is expected to be finalized over the summer, when unemployment was relatively high.
If expectations hold, the Bureau of Labor Statistics’ nonfarm payrolls will grow by just 53,000 jobs, according to the Dow Jones consensus forecast. Even taking into account the anemic growth rate, it is expected to be enough to keep the unemployment rate at 4.1%.
But more broadly, the report will track figures for June and July, which will show a total net loss of 3,000 jobs. Additionally, the initial figures for August have been revised downward for the past four consecutive years.
Taken together, these data suggest that the labor market is neither boom nor bust, but that picture is increasingly on the back burner for Federal Reserve officials as they try to plan their next monetary policy actions.
Dan North, senior economist at Allianz Trade North America, said the current employment situation is “stable but not exciting.”
“We don’t see a lot of really strong growth, and that’s understandable, because if you’re an employer, you’re sitting here and there’s a war going on, energy prices going up and down, tariffs going up, and the administration changing everything overnight, day in and day out,” he added. “So there’s a lot of uncertainty there.”
In fact, geopolitical uncertainty and the impact of artificial intelligence are two major themes in the labor market, along with a shrinking labor force that has helped keep unemployment rates down.
Despite pressures, companies have avoided large-scale layoffs. Weekly jobless claims are subdued, with total layoffs in 2026 at the slowest pace in four years, according to outplacement consultancy Challenger, Gray & Christmas.
Fed officials have said in recent days that they believe the labor market is far less of a concern than inflation. Governor Michael Barr characterized the situation as “stable” earlier this week, and Governor Christopher Waller said Thursday the employment situation was in “satisfactory shape”. It’s not enough to warrant widespread support, but it’s enough that the Fed could consider raising rates without disrupting the labor market if inflation doesn’t ease further.
“Monthly jobs reports have been soft in recent months, but low unemployment claims and a stable unemployment rate have left Fed officials complacent about the labor market,” Citigroup economist Andrew Hollenhorst said in a note.
Citi forecasts that the unemployment rate could rise to 4.2% with just 20,000 new jobs in August, following a decline of 23,000 in July. But Hollenhorst expects the Fed will view these numbers as “stable” and not cause broader concerns.
Still, Citi believes the Fed’s next move will be to cut interest rates. Waller’s comments on inflation led traders to price in the possibility of the Fed meeting within two weeks.
The August report will be affected by several factors other than normal seasonal issues.
In July, the government revoked Temporary Protected Status for thousands of Haitians, potentially reducing employment numbers. The move is expected to affect 350,000 Haitians.
At the same time, Vanguard said its own data on 401(k) accounts showed that employment increased by just 8,000 jobs in the month, due in part to a “significant decline” in employment in the 21-24 age group.
