A jobs report on Friday is set to provide a key gauge of the United States economy as shoppers weather elevated inflation and central bankers weigh a possible interest rate hike.

The economy has shown additional signs of strain in recent weeks, including a bond selloff that threatens to raise consumer borrowing costs and a rise in oil prices amid renewed fighting between the U.S. and Iran.

The fresh government data is expected to show U.S. employers added 53,000 jobs in August, which would mark an uptick from an unexpected loss of 23,000 jobs in July.

The unemployment rate is expected to remain at 4.1%, a low level by historical standards.

The labor market grew at a solid pace over the first half of 2026, despite a historic oil shock that has driven up fuel prices and hiked supply-chain costs for a host of other goods.

The U.S. added an average of 92,000 jobs per month over the initial six months of this year, Bureau of Labor Statistics data showed. That pace marks an improvement from an average of about 7,000 jobs lost per month over the second half of 2025.

The Iran war drove up gasoline prices and catapulted inflation to a three-year high in May. Inflation eased in June and July, but a burst of on-again, off-again fighting in recent weeks caused crude prices to rise again.

The annual inflation rate stands at 3.4% as of July, the most recent month on record, putting inflation more than a percentage point above the Federal Reserve’s target rate of 2%.

The combination of elevated inflation and a fairly resilient labor market has raised the chances of an interest rate hike at the Fed’s meeting later this month, financial markets show.

Investors peg the odds of a quarter-point rate hike on Sept. 16 at about 50%, according to the CME Group’s FedWatch Tool, a measure of market sentiment.

A rate increase could help fight inflation but the move risks a slowdown in hiring. Central bankers, in turn, may closely watch the jobs report for information on the sturdiness of the labor market.

The Fed opted to hold interest rates steady at its most recent meeting in July, but central bankers appeared divided over the move. Three of the 12 members on the Fed’s policymaking board voted in favor of a rate hike, marking the largest number of dissenters casting ballots in the same direction since 2016.

Fed Chair Kevin Warsh, who took the helm of the central bank in May, said in recent days that it should prioritize fighting inflation.

“Inflation is running above our 2% target so the Fed’s predominant focus right now should be on prices,” Warsh said in remarks last week at the Fed’s annual summer gathering in Jackson Hole, Wyoming.

“If the Fed gets inflation wrong and judges the economy wrong, who gets the worst of it? Not the financial high-fliers. Hard-working Americans are the ones left to deal with inflation that is too high or jobs that suddenly appear less secure,” Warsh added.