(Updates with jobs data)

Aug 2 (Reuters) - The Federal Reserve held its benchmark

overnight interest rate steady in the 5.25%-5.50% range at the

conclusion of its July 30-31 policy meeting, but also signaled

that rate cuts may begin as soon as the U.S. central bank's

meeting in September.

The decision will hinge on data between now and then.

Among the key statistics the U.S. central bank is watching:

EMPLOYMENT (Released Aug 2; next release Sept. 6):

U.S. firms added an underwhelming 114,000 jobs in July, and

revisions to the prior two months knocked 29,000 positions from

the previously estimated number of payroll jobs. That pushed the

three-month average total payroll growth down to 170,000, below

the level typical before the COVID-19 pandemic.

The unemployment rate also rose to 4.3%, which could

heighten fears that the labor market is deteriorating and

potentially making the economy vulnerable to a recession.

The number of people in a job or looking for work grew.

Government data in late July showed the slowing of the labor

market is being driven by low hiring, rather than layoffs, with

hires dropping to a four-year low in June.

Average hourly wages rose 3.6% in July compared to a year

ago, versus a 3.8% annual increase in June. The Fed generally

considers wage growth in the range of 3.0%-3.5% as consistent

with its 2% inflation target.

JOB OPENINGS (Released July 30; next release Sept. 4):

In a sign of the job market's continued resilience, the

level of job openings remained above 8 million in June, while

the number of open jobs available for each unemployed person

fell slightly to 1.2, remaining roughly where it was in the

years before the pandemic.

Fed Chair Jerome Powell has kept a close eye on the U.S.

Labor Department's Job Openings and Labor Turnover Survey

(JOLTS) for information on the imbalance between labor supply

and demand, and the pandemic-era jump to more than 2 to 1 in the

number of open jobs for each available worker was emblematic of

the time.

Things have cooled substantially. Other aspects of the

survey, like the quits rate, now down to 2.1, have edged back to

pre-pandemic levels in what Fed officials view as an emerging

balance between the supply and demand for workers. While the

hiring rate has slowed, for example, the layoff rate has

remained stable in a sign of companies holding on to workers.

INFLATION (PCE released July 26; next release CPI Aug. 14):

The personal consumption expenditures price index, used by

the Fed to set its 2% inflation target, shows inflation slowly

subsiding. It fell in June to a 2.5% annual rate, from 2.6% in

the prior month.

Core PCE prices, stripped of volatile food and energy costs,

remained unchanged in June at 2.6%. Despite that reading, the

data looks set to help Fed officials build more confidence that

inflation is moving toward the U.S. central bank's 2% target.

On a month-to-month basis, the PCE index rose 0.1% while

core PCE prices edged up 0.2%. Officials have begun to pay

closer attention to signs of weakening demand in the economy as

a precursor to a slowed pace of price increases.

The separate consumer price index fell in June by 0.1%, with

drops in both volatile energy items and core consumer goods like

vehicles, and weakness in housing costs that Fed officials have

long been waiting to see. The 0.2% rise in shelter prices was

the slowest since August of 2021, and overall it was the weakest

CPI print since May of 2020.

The data pushed the annual rise in consumer prices down to

3% from 3.3% in the prior month, with the more volatile core

index, excluding food and energy, falling to 3.3% from 3.4%.