US non-farm payrolls data, due June 7, is expected to add 190,000 jobs this month, although it is down from the post-epidemic employment peak, which is still healthy by historical standards. Unemployment expected to remain at 3.9%, close to a 50-year low, and despite the slowdown in the job market, companies are still avoiding mass layoffs.

A stable job market may give the Federal Reserve Board more confidence to keep the benchmark interest rate at a high level to combat inflation. With 175,000 new jobs created in April, the unemployment rate may remain around 3.9% in May, according to surveys.

If the data forecasts are correct, the labor market enters a steady pace of progress. Since July last year, the Fed has maintained 23 years of high interest rates, aiming to curb borrowing and consumption by raising interest rates on all types of loans in order to achieve its 2% inflation target.

Recent data show that layoffs are still rare, but the decline in job-hopping suggests that it is more difficult for workers to find high-paying jobs. However, slower wage growth will help control inflation and will not have the same huge impact on the labor market as the recession and mass layoffs, which is what the Fed wants to see happen.

The steady forecast of new jobs in May shows the resilience of the labor market, which could prompt the Fed to keep interest rates high for longer. Such a strategy would help to sustain the fight against inflation while avoiding a rise in unemployment due to reduced economic stimulus. Deutsche Bank economist Brett Ryan and others said that if the forecast is close to the actual data, it will further support the patience to keep interest rates.