Key facts
- Economists expect 85,000 jobs created in May.
- 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, due Friday, will test Federal Reserve officials' waning concern about the job market and frame the opening debate of Kevin Warsh's term as head of the U.S. central bank. Economists polled by Reuters expect U.S. employers created 85,000 jobs in May, a decline from April's gain of 115,000, but enough to keep the unemployment rate unchanged at 4.3%. Employment growth has averaged 76,000 jobs per month in the first four months of 2026, which, in the context of immigration changes, has kept the unemployment rate steady. Fed Governor Christopher Waller stated that the job market appears stable and that containing inflation is the Fed's main priority. Some policymakers are now considering rate hikes, contrary to President Trump's expectations that rates will fall under Warsh. The International Monetary Fund does not expect inflation to return to the Fed's 2% target until the end of 2027 due to the U.S.-backed war with Iran. Investors anticipate a rate hike by early next year. Current inflation is estimated to be around 3.50%, with some Fed officials questioning whether to raise rates to combat it.