Key facts
- The May jobs report is expected to show 85,000 jobs created.
- The unemployment rate is projected to remain at 4.3% in May.
- Average monthly job growth in the first four months of 2026 was 76,000.
- Fed Governor Christopher Waller views the job market as stable and inflation containment as the priority.
- Some Fed policymakers anticipate elevated inflation persisting longer than expected.
- Investors are split on the odds of a rate hike by early next year.
The May jobs report is expected to show steady payroll growth and an unchanged unemployment rate, testing the Federal Reserve's focus on inflation. Economists anticipate 85,000 jobs created and the unemployment rate holding at 4.3%. Fed Governor Christopher Waller views the job market as stable, with inflation containment as the priority. Some policymakers are considering rate hikes, contrary to President Trump's expectations. The IMF forecasts inflation will not return to the Fed's 2% target until late 2027, partly due to the U.S.-backed war with Iran. Investors are divided on the likelihood of a rate hike by early next year. The report comes just before the new Fed Chair Kevin Warsh's first FOMC meeting in mid-June. In April, healthcare and transportation/warehousing led job growth, while information and financial activities lost jobs. Inflation outpaced wage growth in April for the first time since 2023, with consumer prices rising 3.8% and average hourly earnings increasing 3.6%.