Here’s what to expect from Friday’s big jobs report

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Jie/Xinhua
via
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Investors
will
be
looking
to
May’s
nonfarm
payrolls
report
for
more
clarity
on
whether
the
Federal
Reserve
can
ease
up
in
its
battle
against
inflation.

Economists
surveyed
by
Dow
Jones
expect
the
Bureau
of
Labor
Statistics
to
report
that
the
U.S.
economy
added
190,000
more
jobs
on
the
month,
which
would
be
a
slight
step
up
from
the

175,000
gain
in
April.

Moreover,
markets
will
be
taking
a
close
look
at
wage
numbers,
as
average
hourly
earnings
are
expected
to
show
a
0.3%
increase,
slightly
higher
on
the
month,
putting
the
12-month
increase
at
3.9%,
or
the
same
pace
as
the
previous
month,
and
an
indication
that
the
central
bank
still
has
more
work
to
do.

Other
employment
indicators
this
week
showed
a
deceleration
in
private
payrolls
growth,
as

ADP
reported
growth
of
just
152,000,
and
a
slight
uptick
in
the
pace
of
initial
filings
for
unemployment
benefits.

“The
jobs
report
for
May
is
now
particularly
consequential,”
Citigroup
economist
Andrew
Hollenhorst
said
in
a
note.
“A
weaker
reading
[of
less
than
175,000
jobs
and
an
unemployment
rate
of
4%
or
more]
would
be
a
final
piece
of
evidence
that
the
slowdown
will
continue.
On
the
other
hand,
an
unexpected
strengthening
would
reinforce
the
idea
that
there
is
no
urgency
to
cut
rates
and
send
Treasury
yields
higher
again.”

Citi
expects
that
the
report
will
show
just
140,000
jobs,
with
the
unemployment
rate
hitting
4%
for
the
first
time
since
January
2022.

If
that
is
the
case,
it
could
give
the
Fed
impetus
to

cut
interest
rates
sooner
than
expected.

Markets
currently
are
pegging
the
first
rate
cut
to
come
in
September,
with
one
more
on
the
way
in
December.
Citi
is
below
consensus
on
its
jobs
outlook
and
by
far
has
the
most
out-of-consensus
Wall
Street
view
on
rate
reductions,
with
an
expectation
the
Fed
will
start
in
July
and
keep
going
with
four
reductions
by
the
end
of
the
year.

However,
Goldman
Sachs
also
expects
a
below-consensus
160,000
gain
in
payrolls
as
it
sees
seasonal
adjustments
holding
back
job
growth.
However,
the
firm
also
anticipates
an
extra
pay
week
in
the
month
to
offset
some
of
the
seasonal
distortions.