Synopsis:

Goldman Sachs expects 125k in payroll growth for May—in line with consensus—alongside a steady unemployment rate of 4.2%. Wage growth is projected at 0.3% m/m, but federal government hiring may drag on headline numbers due to workforce cuts amid tariff-related uncertainty.

Key Points:

• Nonfarm payrolls: +125k, with solid gains indicated by big data tracking tools.

• Unemployment rate: Steady at 4.2%, reflecting resilience in labor markets.

• Wages: Average hourly earnings to rise 0.3% m/m, with neutral calendar effects.

• Federal jobs: Expected 10k decline in federal government payrolls due to staffing reductions, likely a result of elevated trade policy uncertainty.

Conclusion:

Goldman sees a moderate and balanced labor report for May, reflecting continued growth but with underlying fragility from policy risks. The report should keep the Fed patient, rather than prompt any imminent policy shifts.