HomeTop U.S. NewsU.S. Jobs Report Expected to Provide Fed With Rate Hike Relief

U.S. Jobs Report Expected to Provide Fed With Rate Hike Relief

Government data due to be released next week is expected to show a decline in U.S. employment, thereby providing the Federal Reserve with the leeway it needs to be able to ease up its interest rate hikes in an effort to slow down inflation.

According to estimates, the Bureau of Labor Statistics jobs report is expected to show that payrolls increased by less than 200,000 in May; lower than the average growth of 370,000 per month over the past year. Should the job report forecasts prove accurate, it would mean a fourth consecutive monthly decline in April job openings, thereby highlighting what has been a gradual loosening of tight labor conditions.

Bloomberg Economics remains convinced that while the jobs market is moving in the right direction, the hiring slowdown is not yet at a sufficient level to allow the Federal Reserve to abandon its tight fiscal policy entirely.

“May jobs data are expected to show a slowdown in the pace of hiring — but not enough to put the Fed at ease. The choppiness of the monthly payroll data masks a gradual slowdown in the hiring pace since late-2021 — though the labor-market cooling has been slower than most analysis expected,” the publication explained.

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