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As we gear up for the release of May’s nonfarm payrolls report, investors are eagerly anticipating the data for clues on the Federal Reserve’s future monetary policy decisions.
According to economists surveyed by Dow Jones, the forecast is for the U.S. economy to have added 190,000 jobs in May, a modest increase from the 175,000 gain in April. Wage numbers are also in focus, with average hourly earnings expected to rise by 0.3%, bringing the 12-month increase to 3.9%.
This report holds significant weight as it could influence the Fed’s stance on interest rates. Citigroup economist Andrew Hollenhorst notes that a weaker-than-expected reading could signal a continued economic slowdown, while a stronger report may lead to a delay in rate cuts.
Citi’s forecast of just 140,000 jobs and an unemployment rate of 4% could potentially prompt the Fed to act sooner than the market consensus of a rate cut in September. Citi stands out with its forecast of multiple rate reductions starting as early as July.
Goldman Sachs also anticipates a below-consensus job growth of 160,000, citing seasonal adjustments as a factor. The firm maintains that wage gains remain elevated, posing a challenge to the Fed’s inflation target.
As the Bureau of Labor Statistics prepares to release the report, stay tuned for our expert analysis and insights on how this data could impact your investment strategy. Follow Extreme Investor Network for in-depth analysis and unique perspectives on the latest economic trends and market developments.