WASHINGTON: The upcoming United States jobs report is projected to show the labour market, while still tight, may be starting to transition to more moderate payrolls growth from out-sized monthly advances.

       Payrolls probably increased by about 325,000 in May after rising 428,000 in each of the previous two months, according to the median estimate in a Bloomberg survey of economists ahead of Friday’s report.

       While still robust, the projected advance would be the smallest in just over a year. The unemployment rate is seen falling to a pandemic low of 3.5%, and average hourly earnings are forecast to rise 0.4% from a month earlier. Federal Reserve (Fed) policy makers will probably take the data in stride as they prepare to keep boosting interest rates and wait for a more-sustained cooling in job growth to help moderate wage gains and inflation.

       “The tentative signs that payroll growth is slowing and wage growth is falling are not going to be enough to convince the Fed to back away from their planned series of 50 basis points rate hikes at the next couple of meetings,” Michael Pearce, senior US economist at Capital Economics, said in a note.

       Nonetheless, “a continued slowdown in payrolls and wage growth will eventually convince officials to slow the pace of tightening by the fall,” he said. — Bloomberg