It's possible those rate-hike probabilities
could look very different by tomorrow afternoon.
By that point, the U.S.
Bureau of Labor Statistics will have released its May jobs report,
and the data could go a long way in determining how the Fed thinks about
inflation, its clear priority these days.
Economists expect that roughly 325,000 new
jobs were created in May, with an unemployment rate falling to 3.5% from 3.6%.
That would match the lowest unemployment rate in 50 years, but it would mark a
slowdown in job creation from April's 428,000 increase.
My colleague Brian Hershberg
notes that investors will likely be reading deeper into the report to pull any
inflation-related significance. In
his jobs report preview, Brian writes:
Federal Reserve Chairman Jerome Powell has
pointed to the disparity between openings and the number of unemployed workers
as a sign of the labor market’s froth, suggesting inflation could ease when it
starts to return to a more balanced level. Currently, there are about two
vacancies for every available worker.
...
The labor force participation rate edged down
0.2 percentage point in April to 62.2%, the first decline in several months and
below the prepandemic level of 63.4%. More workers coming off the sidelines and
looking for work could help plug the job vacancy-to-worker gap that Powell
cites as a lingering pandemic aberration and keep wage growth in check.
It could also bring back talk of a September pause
in rate hikes. Stay tuned. The jobs report is due tomorrow at 8:30 a.m.
Eastern.
The Calendar
The BLS releases the jobs report for
May.
Cigna hosts its 2022
investor day in New York. The company will update its financial outlook at the
meeting.
The Institute for Supply Management releases its services purchasing managers’ index for May. Economists forecast a 56 reading, about one point less than the April figure.
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