As anticipation builds for the release of the May employment report by the Bureau of Labor Statistics on Friday, experts are analyzing various indicators to gauge the health of the labor market. The consensus forecast is for 130,000 jobs added, with the unemployment rate expected to remain steady at 4.2%.
Both Goldman Sachs and Bank of America have adjusted their predictions in light of recent data. Goldman Sachs has lowered its forecast for nonfarm payroll growth to +110,000, below the consensus estimate, citing weak employment indicators. On the other hand, Bank of America expects payrolls to rise by a stable 150,000, slightly higher than consensus expectations, but warns of downside risks due to uncertainty surrounding trade policies.
The ADP employment report, which showed only 37,000 private sector jobs added in May, fell well below expectations, indicating potential job gains below consensus forecasts. However, it’s worth noting that ADP’s track record in forecasting the BLS report has been mixed.
The ISM surveys provide further insight into the employment landscape. The ISM manufacturing employment index showed a slight increase, suggesting some job losses in the sector, while the ISM services employment index improved, hinting at potential job gains in services. Unemployment claims remained steady in May, indicating a similar or slightly higher level of layoffs compared to the previous month.
Overall, experts are cautious about the May employment report, with concerns about policy uncertainty impacting hiring decisions. While the trend prior to policy changes indicated steady employment gains, there is a sense of hesitancy among employers, which could reflect in the upcoming report.
As the market awaits the release of the May employment report, investors and analysts will be closely watching the data for any signals about the health of the labor market and the broader economic outlook.
References:
– Calculated Risk, “May Employment Preview”, Link: https://www.calculatedriskblog.com/2025/06/may-employment-preview.html
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