Business is booming.

Jobs Report Will Gauge Economy’s Strength and Fed’s Success

The government will provide the latest snapshot of the labor market on Friday, revealing whether employers continue to pull back from hiring – and if so, to what extent.

Forecasters surveyed by FactSet expect the Labor Department to report that U.S. employers added about 250,000 jobs last month, in line with a modest slowdown from August’s gain of 315,000 jobs. That would likely be welcome news to Federal Reserve officials, who are raising interest rates in hopes of gradually cooling the labor market — and thus inflation — without a spike in unemployment.

Economists and policymakers are also monitoring two other pieces of data that will be included in the report: average hourly earnings, which have shown signs of slowing, and the labor force participation rate, which ticked up in August.

The Fed’s next rate decision is scheduled for Nov. 2, and officials have stressed that the central bank will watch jobs data closely as it decides how aggressive to be. The report is also the penultimate before November’s midterm elections, and both parties are almost certain to seize on the data to prove they are the best stewards of the economy.

There have been some recent signs that employers are reining in hiring. The number of job openings fell in August to 10.1 million from 11.2 million in July. Jobless claims last week rose modestly.

But the labor market has persistently confounded economists, who have been predicting a more consistent slowdown for months. While there were signs that hiring slowed in August, the July report showed a surprising acceleration.

“The job market has been a Ferrari for the last year and a half,” said Nick Bunker, director of North American economic research for career site Indeed. “It’s slowing down, but still moving very, very fast.”

Jeanna Smialek contributed with reporting.