US job growth seen picking up, wage growth likely moderate

Published: June 01, 2018 13:16:09 | Updated: June 03, 2018 11:10:48

Job seekers line up to apply during "Amazon Jobs Day," a job fair held in Massachusetts, US on August 2, 2017 - Reuters/File

US job growth likely accelerated in May as warmer weather boosted hiring at construction sites, but wage gains are expected to have remained marginal, pointing to moderate inflation pressures in the economy.

Nonfarm payrolls probably increased by 188,000 jobs last month, according to a Reuters survey of economists. The economy added 135,000 and 164,000 jobs in March and April, respectively.

“Poor weather had been a negative factor for employment growth in both March and April,” said Ellen Zentner, chief economist at Morgan Stanley in New York. “There should be a rebound from this adverse impact in May. In particular, we look for a robust gain in construction jobs.”

Average hourly earnings are expected to have risen 0.2 per cent last month after edging up 0.1 per cent in April. That would lift the annual increase in average hourly earnings to 2.7 per cent from 2.6 per cent in April, according to a Reuters report Friday.

A string of strong economic data, including consumer spending and industrial production, had fanned fears of inflation against the backdrop of a $1.5 trillion income tax cut package and increased government spending. Inflation is running just below the Federal Reserve’s 2.0 per cent target.

Monthly job gains have averaged about 200,000 this year, more than the roughly 120,000 needed to keep up with growth in the working-age population. The unemployment rate is forecast unchanged at a near 17-1/2-year low of 3.9 per cent.

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