The weak August jobs report might nudge the Federal Reserve to stimulate the economy by buying bonds held by banks, but such liquidity-inducing measures could do more harm than good, says Jim McCaughan, CEO of Principal Global Investors.

The economy added a net 96,000 jobs in August, far less than market calls for about 125,000 jobs or even more.

The government also revised July's figures down to 141,000 from 163,000, and cut June's figures to 45,000 from 64,000, further stoking market calls for Fed intervention.

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The jobs report quickly fueled already growing sentiment that the Federal Reserve will roll out a third round of quantitative easing (QE), possibly at its Sept. 12-13 monetary policy meeting.

Under QE, the Fed buys assets such as Treasury holdings or mortgage-backed securities held by banks, pumping the economy full of fresh liquidity in a way that pushes down interest rates to encourage investing and hiring.

Such accommodative policies tend to weaken the dollar by design.

As a side effect to such policies, commodities prices rise, especially oil, which shoots up on hopes for sustained demand that comes from a jolted economy and also due to a weaker dollar, which makes the commodity a nicely-priced asset in the eyes of investors holding other currencies.

Higher oil prices, in turn, could prompt companies wary of the country's shaky fiscal fate from hiring new employees.

"The basic problem for the Federal Reserve is they're being expected to wave a magic wand and improve the economy. The Fed can do things to increase liquidity. It can't do anything about the fiscal problems, which is what really are holding the economy back," McCaughan tells CNBC.

At the end of the year, tax cuts are set to expire, while automatic cuts to government spending are scheduled to kick in at the same time, a combination known as a fiscal cliff that could send the economy sliding into recession if left unchecked by Congress.

"Businesses don't know what taxes they'll be paying in the new year. They don't know what public spending will look like in the new year. That high degree of uncertainty is holding back business planning and holding back the job numbers," McCaughan says.

Sprinkle in rising crude and gasoline prices into such a mix and uncertainty increases and hiring remains further at bay.

The Fed has already rolled out two rounds of QE since the 2008 financial collapse, injecting $2.3 trillion into the economy in the process.

Many analysts widely predict that a third round (QE3) will be announced this week.

"[I]f they come out with full-on QE3, bond buying, what they will do is inject so much liquidity in the economy it will most likely increase commodity prices," McCaughan said.

"Those increased commodity prices further down the road will hurt jobs, so there will be a perverse impact here if they do further QE3 this week."

The Federal Reserve adheres to a dual mandate of keeping prices stable and employment optimal, which leaves many analysts predicting that QE3 is a foregone conclusion in wake of the August jobs report.

"This weak employment report, in jobs, wages, hours worked and participation is probably the last piece the Fed needs before launching another round of QE," says Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, N.J., according to Reuters.

"QE will boost equities, damage the dollar and do little for the economy, but what else can an activist Fed do?"

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did