Welcome back from the long weekend. Get this — the S&P 500 has notched 38 all-time high closes this year.

However, today is the first day of trading for what’s historically been the worst month of the year for stocks.

This week, though, all eyes are on the labor market.

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Labor Day kicks off labor week

It’s fitting that Labor Day kicked off a week that includes three critical labor market reports on Wednesday, Thursday, and Friday, respectively:

• Job Openings and Labor Turnover Survey (JOLTS)

• ADP’s monthly private employment

• August non-farm payrolls

The August jobs data holds particular gravity.

Remember it was the same report a month ago that led to a sharp stock sell-off and led some economists to call on the Fed to make an emergency interest-rate cut.

The panic subsided and stocks eventually finished August higher.

That said, the government did announce near the end of the month that it had overstated job growth by 818,000 in the 12 months up to March.

The updated numbers will either cement or dissolve concerns that the labor market is deteriorating more than expected.

Those forecasts, in turn, will materialize in the central bank’s next move.

To be sure, Jerome Powell has already signaled that a rate cut is coming this month. What remains uncertain is the pace of those cuts.

Weaker-than-expected jobs data could open the door to a jumbo, 50-basis-point move lower, whereas as-expected reports could lead to the typical quarter-point cut.

Economists surveyed by Bloomberg expect that the US added 163,000 jobs in August, and the annual unemployment rate dipped from 4.3% to 4.2%.

The unemployment rate has not decreased in six months.

Meanwhile, anecdotal evidence suggests everyday Americans are not so confident in their employment outlook. 

A new Bankrate survey found that almost three in four respondents were concerned about job security.

Plus, nearly half of workers planned to look for a new role over the next year.

Morgan Stanley, for its part, sees the labor market as moderating but not in a “slump.” The firm expects the Fed to cut rates by 25 basis points.

“We see a solid [non-farm payrolls] print,” analysts wrote in a note Friday, “confirming our view that the economy is slowing but not heading to a recession, and we don’t forecast a sharp increase in the unemployment rate on the horizon.”

Feedback or thoughts? Hit reply to this email or let me know on X @philrosenn.

Elsewhere:

📈 The S&P 500 keeps winning. Friday marked the index’s fourth consecutive winning month in a row. The Dow and Nasdaq Composite also finished August in the green. At the same time, S&P 500 companies recorded their fourth consecutive quarter of earnings growth, shrugging off much of the summer worries. (MarketWatch)

💼 Look out for jobs data this week. On Friday, the government will release the August jobs report, which could determine whether the Federal Reserve initiates a jumbo-sized rate cut or not. Before that release, we’ll also see updates on job openings, wage growth, and manufacturing data. (Bloomberg)

💡Nvidia earnings didn’t cut it. Stellar earnings be damned, investors looked let down last week. The company just saw its fifth quarter in a row of triple-digit annual sales growth, and it secured more than $30 billion in revenue for the first time ever. And yet, Wall Street has grown so accustom to ridiculous Nvidia earnings that these numbers didn’t push the stock higher. (Yahoo Finance)

Rapid-fire:

• The Fed’s preferred inflation gauge for July showed prices cooling as expected (Yahoo Finance)

• Parenthood has become increasingly expensive and child-care costs have outpaced inflation for the last 2 decades (Barron’s)

• Nvidia’s earnings inspired in-person watch parties and fanfare among dedicated retail investors (WSJ)

• China’s economy is in such a jam that weak demand for commodities like coal and soybean have led to huge stockpiles (Bloomberg)

• A Fed rate cut won’t help ease credit card debt, according to Bankrate (Fox Business)

• Tesla sales in China climbed 3% in August compared to a year earlier (Reuters)

• Volkswagen is considering unprecedented factory closures in Germany to help cut costs ahead of a union fight (Bloomberg)

Last thing:

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