May Nonfarm Payrolls Expected to Rise by 125,000
Despite a Decrease of 52,000 from Previous Month, Outlook Remains 'Robust'
Beige Book Labor Market Assessment on June 4 Draws Attention
Powell to Speak on June 2... Will He Reaffirm Fed Independence?
This week, Wall Street's attention is focused on key employment indicators that will reflect the impact of the tariff policies implemented by the Donald Trump administration. Although the U.S. economy has shown more resilience than expected despite high tariff policies, signs of a slowdown in consumer spending and hesitancy among businesses to hire are raising concerns about a weakening labor market.
According to the U.S. Department of Labor on June 1 (local time), the nonfarm payrolls data for May will be released on June 6.
According to a Bloomberg survey, nonfarm payrolls are expected to increase by 125,000 in May, falling short of April’s figure of 177,000. The monthly average job growth over the past three months is estimated at 162,000. The unemployment rate is projected to remain unchanged from the previous month at 4.2%.
The nonfarm payrolls, released by the Department of Labor, include employment figures from both the private and public sectors, serving as a key indicator of the overall health of the labor market. While labor demand has somewhat slowed recently, it is expected that the labor market remained relatively robust in May. The Federal Reserve has assessed that the labor market is generally balanced, but is paying close attention to the possibility of weakening in the coming months.
The slowdown in consumer spending, which accounts for two-thirds of the U.S. economy, is another factor increasing attention on employment. According to the Department of Commerce, consumer spending in the first quarter rose by only 1.2% compared to the previous quarter, marking the lowest growth rate in about two years. This figure is lower than the previously announced advance estimate of 1.8%, indicating that the recovery in consumer spending is weakening faster than expected.
Before the May employment report is released, a range of employment indicators will be published sequentially. On June 3, the Job Openings and Labor Turnover Survey (JOLTs) for April will provide insight into businesses’ hiring demand, and on June 4, the private sector employment data for May will be released by ADP, a private labor market research firm. On June 5, the weekly initial jobless claims data will be announced.
Attention is also focused on the Federal Reserve’s Beige Book, an economic conditions report to be released on June 4, which will include an assessment of the labor market. Last month’s Beige Book noted that “businesses in several regions are taking a wait-and-see approach to hiring,” and that “some have paused or slowed hiring until economic conditions become clearer.” As President Trump’s tariff policy announcements and delays continue, with some tariffs actually taking effect, it is interpreted that more companies are postponing their hiring plans.
In addition, the Institute for Supply Management (ISM) Manufacturing Index for May, a leading indicator of the manufacturing sector, will be released on June 2. The market consensus is 49.3, a slight improvement from April’s 48.7, but still below the baseline of 50, indicating that the contraction phase in manufacturing continues.
On June 2, Federal Reserve Chair Jerome Powell will deliver a keynote speech at the 75th anniversary of the Fed’s Division of International Finance. Given that he reaffirmed his commitment to an independent monetary policy during his first official meeting with President Trump after his re-election last week, attention is focused on what remarks he will make in this speech.
Public speeches by other Fed officials, including Fed Governor Lisa Cook and Fed Governor Adriana Kugler, will also continue this week. Fed Governor Christopher Waller will deliver a keynote address at the BOK International Conference hosted by the Bank of Korea at 9 a.m. KST on June 2, and will discuss a range of monetary policy topics, including the U.S. economic outlook, with Bank of Korea Governor Rhee Changyong.
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