Job creation expected to have bounced back in August as Fed weighs next hike

US employers are expected to have added 55,000 jobs in August, bouncing back from July's surprise job losses, when the Bureau of Labor Statistics releases its latest reading on the labor market on Friday.

Economists surveyed by Bloomberg expect the unemployment rate to hold steady at 4.1%. Another month of modest job creation and an unemployment rate that's relatively low by historical standards would be further evidence that the US remains in a "low hire, low fire" environment, marked by relatively sluggish hiring, but also limited layoffs .

Friday's report is a new data point for the Federal Reserve ahead of its Sept. 16-17 meeting. The central bank has been weighing whether to hike rates to combat persistently hot inflation, but doing so risks further slowing a relatively sluggish job market.

Fed officials appear split on whether a rate hike in September is warranted. Chairman Kevin Warsh signaled in a speech last week that the Fed needs to do more to combat inflation, while Fed governor Christopher Waller said on Thursday that he would lean toward holding rates steady if new data shows that inflation is improving.

Inflation data released on Sept. 11 will likely be the deciding factor for the Fed because Warsh has emphasized that the labor market looks stable, Bank of America economist Shruti Mishra wrote in a note this week.

"[August] CPI is likely the more important release for the Fed, and payrolls are unlikely to shift [September] pricing unless the report is considerably weaker than our forecast," Mishra wrote.

As of Thursday, traders see near-even odds of the Fed delivering a 25 basis point hike or holding rates steady, according to CME FedWatch.

Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.