Hiring in May is expected to have been strong, with 185,000 jobs created and unemployment steady at a low 4.4 percent.
But wage growth is expected to remain sluggish, improving just 0.2 percent over April.
Friday's employment report, however, is expected to show that gains in hiring were broad-based. Business and professional hiring, as well as construction and possibly manufacturing and retail — a recent area of weakness — are all expected to show improvement.
"The good news is this is the best college grad year in a decade. We should see full-time hires pick up," said Diane Swonk, CEO of DS Economics. A recent Korn Ferry survey showed salaries for new college graduates at an all-time high.
But economists are closely watching the average hourly wages in the jobs report for signs of a pickup. Economists expect to see gains of just 0.2 per cent month over month, after a 0.3 percent increase last month, according to Thomson Reuters data. That would equal about a 2.6 percent yearly gain when the Federal Reserve would like to see 3 percent. Rising wages are an early sign of inflation.
Swonk expects to see unemployment rise to 4.5 percent because more people will be joining the work force. "We're pulling people in," she said, noting the state of Maine is talking about releasing prisoners to fill summer jobs.
"Those are all signs that they're broadening the pool," Swonk added. She expects 180,000 payrolls.
Deutsche Bank chief U.S. economist Joseph LaVorgna expects to see 235,000 jobs added in May, well above the 185,000 consensus, reported by Thomson Reuters.
"It's going to be very broad-based. Generally speaking, when you get a number well above 200,000, you tend to see a lot of areas do well, like manufacturing and construction," he said. LaVorgna also said he expects retail, hit by store closings, to stabilize and add some jobs.
LaVorgna expects an increase of 0.2 percent in hourly wages.
"Wages are rising, but not very quickly. My guess is you'll see further grinding improvement, but not one that causes market expectations of inflation to meaningfully shift," said LaVorgna. "However, if there is an upward swing in the wage number, with a solid report, the market could get a little more nervous."
Markets, and the bond market in particular, have been full of speculation that the Federal Reserve will raise interest rates just one more time this year because of lower inflation. A jump in wages could stir up the bond market, where yields have been moving mostly lower.
Stocks were poised to open higher after the Dow, S&P 500 and Nasdaq all closed at record levels Thursday. Yields, which move opposite prices, were barely changed. The 10-year was at 2.20 percent.
Goldman Sachs economists expect just 170,000 payrolls. They raised their forecast by 10,000 after ADP reported private sector payrolls of 253,000 Thursday morning.
The economists said they believe that there was an artificial boost in April's job numbers, which saw 211,000 payrolls after bad weather subtracted from March employment gains. That could moderate in May.
Many economists believe the labor market has tightened so much that monthly job growth will be more in line with the 185,000 expected than a number of more than 200,000. In a tightening labor market, companies have difficulty finding employees with the right skills.
Goldman economists said that payroll growth tends to slow during the late spring in years with tight labor markets.
"Labor constraints appear particularly binding in May [and August] in these years. One potential explanation is that the May payroll period occurs after much of the start-of-year seasonal slack has been wound down [earlier in the Spring hiring season] but before the entry of students and recent graduates into the labor force [in late May and June]," they wrote.
Besides the employment report, international trade is also released at 8:30 a.m. ET.