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Stronger wage growth expected to pave way for US interest rate rise in June
Stronger US wage growth and a healthy jobs market are expected to pave the way for America's central bank to raise interest rates for the second time this year.
Official data this week are expected to show pay growth edged up by 2.6pc in the year to May, following a series of weak numbers that suggested that the jobless rate could fall further before pay pressures started to emerge.
Economists believe the world's biggest economy created 180,000 jobs last month, following growth of 194,000 jobs in April.
Paul Ashworth, an economist at Capital Economics, said solid jobs growth would "seal the deal" on an interest rate hike in June, when the US Federal Reserve will also publish its latest evaluation of the economy.
Upward revisions to US economic growth for the the first quarter of 2017 will also be welcomed by policymakers.
Analysts at Investec expect the unemployment rate to remain at a pre-crisis low of 4.4pc.
"We flag the importance of the pay growth figures ahead of the June 14 Fed decision," they said in a note.
"Hourly earnings growth has seemingly lost momentum since the start of the year and if it stays that way we can expect the Fed to stick with a cautious approach to rate rises and balance sheet reduction, later this year."
Investors have fully priced in a June rate hike and believe policymakers will lift the federal funds target range to between 1pc and 1.25pc from its current range of 0.75pc to 1pc.
Minutes of the central bank's latest meeting revealed that officials remained on course to raise interest rates "soon".
Policymakers signalled they would adopt a cautious approach while they wait for more evidence that the economic slowdown at the start of 2017 was "transitory".