Economists say Friday’s jobs data will ‘underscore’ challenges facing Fed
Friday’s nonfarm payrolls, unemployment rate and hourly wages data will underscore the challenges the Fed faces ahead of its June policy meeting, said Joe Davis, chief economist at Vanguard.
Economists polled by Dow Jones expected non-farm payrolls to have increased by 190,000 in May, which would be lower than the 253,000 gain in April. They forecast an unemployment rate of 3.5%, slightly higher than April’s 3.4%.
Hourly wages are expected to rise 0.3% month-over-month and 4.4% year-over-year. In April, wages rose by 0.48% month-on-month and 4.45% month-on-month.
“We believe tomorrow’s labor market report will highlight the continued challenges the Fed faces in pushing inflation back to target,” Davis said. Pause for a while to assess the impact on the macro environment, although the more important aspect of our view remains that the Fed is on hold until at least the end of 2020. That year.”
“Signs of continued labor market tightness in tomorrow’s report will provide further support to these views,” he added.
— Alex Haring
First Quarter Earnings Scorecard
First-quarter earnings season is drawing to a close, with 99% of the S&P 500 companies reporting results. According to FactSet, 78% of S&P 500 companies reported positive earnings per share for the quarter, above the five-year average of 77%.
However, earnings growth has been disappointing compared to the long-term average. Earnings for S&P 500 companies overall beat estimates by 6.5 percent, below the five-year average of 8.4 percent, according to FactSet.
— Yun Li