U.S. employers probably accelerated hiring in July, signaling a durable demand for workers even with geopolitical tensions and high inflation in the background.
Employers this year have added workers at a faster pace than in 2025, giving consumer spending a boost. A key gauge of domestic demand jumped in the second quarter at its quickest clip since early 2023, powered by both households and companies.
Because hiring and growth have stayed sturdy, several Fed policymakers want to raise rates to fight inflation.
Other releases this week will give investors more clues: job openings arrive Tuesday, ADP Research's private-payroll estimate Wednesday, and initial jobless claims Thursday.
The headline numbers only tell part of the story. Anna Wong and Stuart Paul, along with Eliza Winger at Bloomberg Economics, contend that "the labor market appears less stable than the headline unemployment rate suggests."
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"Temporary hiring associated with the FIFA World Cup is likely to reverse, leading to declines in leisure and hospitality employment, alongside weakness in construction. Looking ahead to the fall, hiring increasingly will depend on state and local governments - and we don't see them as a particularly robust source of support, given tighter budgets and slowing growth in tax revenues," they wrote.
Separately, the Institute for Supply Management's service and factory surveys will give a fresh snapshot of July economic activity. Scheduled to speak later in the week are Kansas City Fed's Jeff Schmid, Lisa Cook of the Federal Reserve Board, and St. Louis Fed's Alberto Musalem.
The Fed's next move is still an open question. Officials held rates steady last week, but three policymakers voted to raise them. At the same time, softer inflation readings in several foreign economies have strengthened the case for easier policy abroad, widening the gap between the Fed's path and that of other central banks.
Canada also releases its employment figures, and another gain is anticipated. Brazil's monetary authority is expected to lower rates, whereas Mexico, India, and the Czech Republic could keep theirs unchanged.
India's central bank takes center stage Wednesday in Asia.
Monday brings a wave of purchasing managers' indexes from across Asia, which should show whether U.S.-Iran tensions are starting to disrupt supply chains, shipping lanes, and sentiment. Strong spending on artificial-intelligence infrastructure likely supports PMIs for technology-dependent economies such as Taiwan, South Korea, and Japan.
According to Bloomberg Intelligence, South Korean inflation will probably cool to the upper 2% range in July before exceeding 3% in August, which would support consecutive rate hikes. Inflation figures are also due in Thailand, Vietnam, Pakistan, the Philippines and Indonesia, all big importers of Middle Eastern energy.
Swiss consumer prices probably slowed to 0.4% in July, backing the Swiss National Bank's view that zero rates can remain in place for a while. Turkey's inflation rate likely dipped to 31.9% from 32.1% in June. Sweden reports inflation Thursday; a continued cooling trend would give the Riksbank room to stay on hold.
Albania and Armenia also announce rate decisions.
In Latin America, Brazil's mid-July inflation of 4.52% came in below all 33 estimates. Chile left its benchmark at 4.5% for a fifth consecutive meeting; inflation is 4.3%, and output has contracted for five straight months.
Colombia's central bank unexpectedly kept its key rate unchanged at 12% on July 31, with minutes due this week ahead of President-elect Abelardo de la Espriella's inauguration.
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