This could be good news. So few people filing for unemployment benefits through the month of August might mean the unemployment rate didn’t go up last month, but we’ll find out when job numbers are reported tomorrow. So we might not need to worry that a wave of layoffs will be hitting us just yet. But a strong jobs report could also reinforce the Federal Reserve’s belief the U.S. economy will be strong enough to handle more interest rate hikes. Yes, that means inflation should hopefully come down, but higher interest rates might take a bite out of corporate profits, which investors don’t love. Stocks closed out the month of August with losses and are still losing ground today to start the new month. Expectations of another large rate hike when the central bank has its next policy meeting on September 20 and 21 are continuing to weigh on investors. And if the jobs report is strong, the chances of another super-sized rate hike of 75 basis points will go up. Currently, the markets are forecasting a 72% chance that the Fed will hit us with another huge hike. But what would a another rate hike mean for you? The higher interest rates go, the more you can expect rates to go up on loans like a mortgage or a car loan. This article originally appeared in ‘The Balance Today’ newsletter. You can get ‘The Balance Today’ delivered to your inbox daily, just sign up here.
