Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A 180k May nonfarm payroll increase is anticipated, after gains of 253k in April, 165k in March, 248k in February, and 472k in January. There is a neutral risk from the claims rise in May given distortions in the data from Massachusetts. Hours-worked are assumed to rise 0.1% after a 0.2% April rise, while the workweek holds steady at 34.4. Average hourly earnings are assumed to rise 0.3% after a 0.5% gain in April, while the y/y wage gain should tick down to 4.3% from 4.4%. In the last expansion, we saw a 3.5% peak for y/y wage gains in both February and July of 2019, before the pandemic boost to an 8.0% peak in April of 2020. The ensuing strength in wage gains has allowed continued robust y/y increases, though the return of low-paid workers to the workforce is likely restraining wage increases.
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