Jobs growth has been an important factor for the Fed, and it has remained robust. Meyer expects the Fed to hike rates in June, and then again in December. But the market has priced out rate hikes, and some economists believe the Fed's forecasts for two rate hikes this year have been too ambitious.
"The uncertainty facing our economy right now is heightened by political events this summer both at home and abroad, and what we don't know is how the markets react to that uncertainty," said Lee. "The Fed is trying to breathe life into dead meetings." Lee was referencing the fact that the Fed has said it is data-dependent and described every meeting as potentially being "live," meaning it could hike rates. But many economists have written off June because of the uncertainty around the U.K. vote on whether to remain in the European Union.
"The data's important, but we have another month of payroll jobs to go before June 15 [the Fed meeting]," said Rupkey. "[The jobs number's] not as critical as it would be ordinarily. It could take a rate hike off of the table if it's 150,000." Rupkey expects to see 220,000 jobs, a stronger than average forecast because the jobless claims in the week of the April employment survey were the lowest since 1973.
But he does expect the hiring pace to slow down in coming months. "At some point we're going to run at 170,000 every month, and not 200,000. It will slow a bit and maybe the next rate will be 150,000. The population isn't growing and [almost] everyone who lost their job in the recession has found work," Rupkey said.
Besides jobs data, consumer credit is reported at 3 p.m. There are a few earnings from Arcelor Mittal, Madison Square Garden, Exelon, Weyerhaeuser and Gogo. Berkshire Hathaway reports after the closing bell.