The Reserve Bank of Australia will have a lot of data to sift through when it holds its monthly board meeting on Tuesday.
There has been a mass of figures in the past month which has seen economic growth slowing after its rampant recovery from last year's recession and building signs of a marked downturn in the September quarter.
There is no doubt the RBA will leave the cash rate at a record low 0.1 per cent at the meeting.
But economists are debating whether to expect changes to its bond buying program, which aims to keep market interest rates and borrowing costs low.
The RBA had planned earlier this year to wind back its weekly buying to $4 billion from $5 billion from September.
Some economists believe it will delay this winding back, or so-called tapering, in the face of a deteriorating outlook due to the COVID-19 lockdowns in NSW and Victoria, the nation's two most populous states.
Treasury predicts these lockdowns could result in a contraction of at least $2 billion, while economists put it as large as $4 billion.
Westpac chief economist Bill Evans believes the RBA should respond by raising its bond purchases to $6 billion a week.
"It would not be the size of the increase but the signal that the RBA was prepared to do more than just reverse the August decision and respond to the deteriorating outlook," Mr Evans said.
Economists will also be looking for any signs of change in the RBA's forward interest rate guidance given a more uncertain outlook.
The RBA wants to see inflation sustainably within its two to three per cent inflation target, which will need the unemployment rate to fall to four per cent and wages growth of at least three per cent.
It does not expect these conditions to be met before 2024.
While the jobless rate did fall to a 12-year low of 4.6 per cent in July, the expected economic downturn is expected to see this rise again above five per cent.
At the same time, wages growth remained weak at 1.7 per cent in the June quarter.
Two separate indicators this week will give a flavour of the current state of the labour market.
The Australian Bureau of Statistics will issue its payroll jobs report for the fortnight ending August 14 on Thursday, a guide to the full labour force report for August due later this month.
The week kicks off on Monday with ANZ releasing its job advertisement series for August on Monday, a pointer to future hiring.
Meanwhile, Australian shares are set to open lower after a generally soft finish on Wall Street after its key monthly payrolls report showed just 235,000 jobs were added to the US economy in August.
Investors saw this as surprisingly weak after two previous months of robust hiring, but coming at a time when the highly contagious Delta variant has discouraged people from flying, shopping and eating out.
The S&P 500 slipped 1.52 points, or less that 0.1 per cent, to 4,535.43. The Dow Jones Industrial Average fell 74.73 points, or 0.2 per cent, to 35,369.09.
The Nasdaq composite bucked the trend, rising 32.34 points, or 0.2 per cent, to 15,363.52, its third straight gain.
Australian share future were 23 points down at 7483.
The Australian benchmark S&P/ASX200 index ended higher by 37.2 points, or 0.5 per cent, to 7522.9 on Friday.
Australian Associated Press
