Stephen Miran, President Trump’s pick for the Federal Reserve board, faced questioning about a plan for him to keep his White House job while at the central bank. The arrangement would mark the first time since the creation of the modern Fed in the 1930s that a sitting member of the executive branch would join the central bank's rate-setting committee. On the data front, the Bureau of Labor Statistics will publish its first jobs report since Trump fired the agency’s leader after she delivered surprisingly lousy news about spring employment. The monthly nonfarm payrolls data, due this morning, is expected to provide more evidence that the labor market cooled over the summer. Friday's data will be scoured by investors, who have ramped up bets that the Fed will resume cutting interest rates: Markets are pricing in two or three rate cuts this year, starting in mid-September.

President Trump’s sprint to take control of the Federal Reserve played out in a striking split-screen fashion on Thursday, just two weeks before the central bank’s next policy meeting.

On Capitol Hill, Trump’s pick to fill a vacant seat on the Fed’s board faced questioning over an unprecedented plan to keep a White House job while serving on the Fed. A few blocks away, government lawyers defended in federal court the first-ever attempted presidential firing of a sitting Fed governor.

Both Stephen Miran’s expected confirmation and Fed governor Lisa Cook’s legal challenge are racing toward the Fed’s Sept. 16-17 meeting, where policymakers are expected to consider cutting interest rates—a move Trump has repeatedly demanded.

• Watch: Trump Nominee Says He’ll Preserve Fed Independence
• Watch: Stephen Miran Declines to Comment on Trump’s Firing of BLS Commissioner
• Watch: Sen. Warren Grills Trump’s Fed Governor Nominee

John Williams, president of the New York Fed, said Thursday that circumscribed tariff-induced inflation, as well as a slowing labor market, will likely give the Fed the leeway to lower interest rates toward a more neutral setting. Williams, speaking to a group of economists in Manhattan, said that while new trade barriers are lifting prices, "I am not seeing signs of amplification or second-round effects of tariffs on broader inflation trends," according to a published text of his remarks. All in all, tariffs are likely to continue pushing prices higher through the first half of next year, he added, but initial evidence has been reassuring that they won't spark a sustained bout of inflation. That trend, combined with slower economic growth and cooling in the labor market, will likely allow the Fed to bring interest rates toward a lower, neutral setting, rather than leaning against economic expansion, Williams said. (Dow Jones Newswires)

• The Job Market Is Getting Weaker. Will Fed Rate Cuts Help?

The large services side of the U.S. economy grew at the fastest pace in six months in August, but the improvement was driven by efforts to beat tariff-related price increases as businesses prepared for the Christmas shopping season. A survey of businesses such as banks, retailers and restaurants rose to 52.0% last month from 50.1% in July, the Institute for Supply Management said Thursday. Any number above 50% signals expansion. (MarketWatch)

Nasdaq is seeking to tighten its rules for small Chinese stocks, following criticism from Wall Street veterans and investor-protection advocates that such listings have become a hotbed for fraud and manipulation. The New York exchange operator on Wednesday proposed a new rule requiring that companies principally operating in China, including Hong Kong and Macau, raise at least $25 million in an initial public offering to go public on Nasdaq.

8:30 a.m.: U.S. Employment Report

10 a.m.: Employment Trends Index
3 p.m.: Consumer Credit
7 p.m.: OECD Financial Markets Week event

Economist Omair Sharif notes a surprising result in the August private-payrolls data from ADP: The private education/health sector--without any seasonal adjustment--shed a net 50,000 jobs last month, the worst result ever for the sector. Typically, it adds about 35,000 jobs in August, Sharif notes. "It is hard to explain the collapse, " he writes. Data from the JOLTS report, released Wednesday to show data through July, indicated broad stability in this sector over the past year, so the apparent sudden decline is confusing. The official August jobs figures from the Labor Department, due Friday morning, may provide more of a clue. — Matt Grossman

New York Fed President John Williams says that inflation trends this summer have given him more confidence that tariffs may lift prices but are less likely to kick off a sustained bout of inflation. For one thing, inflation expectations have remained curtailed, Williams tells a group of reporters in New York City. For another, the levels at which companies are passing through price increases to their customers is, so far, "at or below estimates of what those would be." Uncertainty abounds, however. It's possible such price increases simply "still maybe haven't shown up in the data yet," Williams says. . — Matt Grossman

• The number of people who applied for unemployment benefits in the seven days ended Aug. 30 rose by 8,000 to 237,000, the Labor Department said Thursday. It is the highest level since late June. (MarketWatch)
• The U.S. lowered tariffs on Japanese automobiles and auto parts from 25% to 15%, the White House said on Thursday, as President Trump signed an executive order implementing a trade pact with Japan struck last month.
• Canada’s goods-trade deficit narrowed in July as exports continued to show signs of stabilizing after the blow of U.S. tariffs earlier this year.
• The eurozone economy grew marginally over the three months through June, figures confirmed Friday, leaving the European Central Bank unlikely to cut its key interest rate next week.
• German factory orders unexpectedly slumped in July, as weaker foreign orders reflected a fragile export market amid increased trade barriers.
• The U.K.’s government has struggled to halt a rise in its debt, but a recent increase in yields on its long-term bonds might not make its task much more difficult.
• U.K. retail sales increased at the start of the third quarter, a boost as the country looks to get some momentum into its sluggish economy.
• India's government has responded to a major disappointment in terms of trade with the U.S. by stepping up efforts to overhaul the economy, including major changes to the tax system that authorities approved on Thursday. (Barron's)
• World food prices were little changed last month, as higher vegetable oil and meat prices offset declines in dairy and cereal, the Food and Agriculture Organization of the United Nations said.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.