Wall Street firm Goldman Sachs is predicting a solid labor market report for May, with nonfarm payrolls expected to grow by 125,000 jobs, in line with market consensus. The unemployment rate remains steady at 4.2%, indicating resilience in the labor markets.
However, wage growth is projected to be relatively modest at 0.3% month-over-month, driven mainly by neutral calendar effects and offsetting potential federal government hiring.
A key driver of this slowdown is a expected decline of 10,000 jobs in the federal government sector due to workforce cuts amid tariff-related uncertainty. This could drag on headline numbers despite solid gains from private payrolls.
According to Goldman Sachs, the labor report suggests a moderate and balanced market, reflecting continued growth but with underlying fragility from policy risks. The firm’s analysts expect this report to keep the Federal Reserve patient, rather than prompting any imminent policy shifts.
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Source: https://www.forexlive.com/news/goldman-sachs-what-we-expect-from-tomorrows-us-may-payrolls-20250605