The May jobs report is set to be released soon and could have a significant impact on whether the Federal Reserve raises rates in June. The demand for labor remains strong, as evidenced by recent surveys of employers that suggest they are having difficulty filling positions due to a lack of qualified applicants. This indicates that wages will likely continue to rise, which would provide further evidence for the Fed’s decision-making process when it comes time to make its rate hike announcement.
Our preview suggests that job growth has been steady over the past few months and unemployment levels remain low across most sectors. This means there is still plenty of room for wage increases without causing inflationary pressures or overheating in certain markets, such as housing or consumer goods prices. If this trend continues into May, then it could give the Fed more confidence when deciding if a rate increase should take place at their next meeting in June.
Overall, we expect the upcoming jobs report will help shape whether or not rates go up come June but only time will tell what action (if any) is taken by policymakers at this point.