U.S. employment likely rose by 638,000 in May while wage growth continued to moderate, according to a real-time labor market index from the Federal Reserve Bank of St. Louis that "points to a still very strong labor market," economist Max Dvorkin told MNI.
The Coincident Employment Index rose by 0.58 pp in May, translating into a not seasonally adjusted gain of 911,000 or 638,000 after seasonal adjustments. "The employment index shows an important increase in employment in May," Dvorkin said.
The model uses weekly data from time-tracker software provider Homebase and closely tracks the Labor Department's household survey measure of employment. Wall Street analysts are anticipating a slowdown in hiring to 188,000 new payrolls for the month, as measured by the establishment survey.
Wage growth for hourly workers and job stayers slowed to just over 3% over the past 12 months, based on the Homebase data. However, measuring at a higher frequency, trimmed mean wage changes over a four-week period is holding at a roughly 4% annualized gain, about a percentage point higher than its 2019 averages but much lower than the 2021-2022 period.
"At this high frequency, wage inflation has hovered around 4% for the last few months, with no clear downward trend," Dvorkin said.
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