Labor Department set to release May jobs report. Here’s what to look for.

The US job market is starting to resemble what it was before the pandemic upended work and life around the world.

With the Labor Department set to release May employment data on Friday, analysts predict that employers added 180,000 jobs last month. That would represent a slower pace of hiring than in the first three months of the year, but it would show that job growth remains vigorous enough to keep unemployment under control.

In fact, if the country’s unemployment rate remains at 3.9%, it would mark the 28th consecutive month with unemployment below 4% – the longest such period since the early 1950s, government data shows .

More generally, experts say the job market is consistent with an economy approaching a “soft landing” rather than plunging toward a recession. Layoffs continued to be moderate and inflationwhich exploded at the beginning of this year, resumed its gradual descent.

Art Hogan, chief market strategist at B. Riley Wealth, said the narrative will hold as long as there is no surprise in Friday’s jobs report. A surprise in this case would be if May wage gains fell below 100,000, which would indicate the economy is hitting a wall, or exceeded 300,000, which would raise concerns about overheating.

Waiting for the Fed

By striving to slow the economy enough to contain inflation, the Federal Reserve seeks to balance the supply and demand for workers without causing a rise in unemployment or triggering a recession.

“If the other data in the jobs report looks like it did in April, then that should help the Fed feel more comfortable lowering interest rates,” wrote economist Dean Baker, co-founder of the Center for Economic Research and Politics, in a statement. publish this week.

That April jobs report made the economy adding 175,000 jobsbelow expectations and a reduction from blockbuster hiring in March, when employers added 315,000 jobs.

April’s data also included the smallest increase in payrolls in six months, easing concerns that the economy was accelerating again and would likely prevent the Fed from cutting interest rates this year.

Nonfarm payrolls need to average about 150,000 per month to keep unemployment in check, given current population growth, and would be in line with pre-pandemic hiring levels, Hogan noted.

A number between 150,000 and 200,000 on Friday would be good enough to say the economy continues to grow and would likely keep the Fed on track to cut interest rates in September, he added.

Why do so many Americans stay sad about the country’s financial situationHogan believes human psychology and an election year come into play.

“If we look at the hard data – retail sales, non-farm payrolls – the economy appears to be doing well. But if we incorporate some of the survey data, what people say is that it looks like things are falling apart,” Hogan said.

For example, Wall Street analysts and economists focus on sequential monthly inflation rates, while consumers tend to look at the numbers in the aggregate.

“It’s the difference between me seeing inflation rising just 0.2% month over month, while consumers expect prices to rise 20% since 2020,” said the strategist. Wages increased 25 percent during that period, Hogan noted, “but people don’t necessarily feel it.”