Weak US jobs report cools Fed hike odds, inflation data next

A surprisingly weak July jobs report, showing a 23,000 payroll decline, lowered expectations of a September Federal Reserve rate hike and raised the stakes for next week's inflation data. The unemployment rate edged down to 4.1%. Investors welcomed the data, and market odds of a quarter-point hike in September fell from 55% to 42%. July consumer inflation is expected at 3.4% year over year, above the Fed's 2% target. A hotter-than-expected report could signal stagflation and force another hike, while soft data may let the Fed pause. Next week also brings PPI, retail sales, and jobless claims.