Companies hired at a robust pace in May, but workers are still not expected to have seen much change in their pay checks.
Economists expect there were 188,000 jobs created and unemployment held steady at 3.9 percent in May, according to Thomson Reuters. But the pace of wage growth likely was at about 0.2 percent, or a year over year gain of 2.7 percent.
That wage number is seen as the most important part of the monthly employment report, expected at 8:30 a.m. ET Friday. It is a number that has frustrated the Fed and is closely tied to expectations for interest rates, in the eyes of the markets. A jump in wages to a higher, say 3 percent level, would imply to the Fed that inflation will be edging higher, and more interest rate hikes could be justified.
"That's the only number that matters really," said Aaron Kohli, fixed income strategist at BMO. The market continues to consider whether the Fed will raise interest rates three or four times this year, and that wage data could be a factor driving the argument for a fourth if it is higher than expected.
The Fed has forecast three rate hikes this year, and the second is expected to come at its next meeting on June 13. The market had been leaning toward a fourth rate hike this year, but that changed when political turmoil in Italy raised concerns about euro zone growth, and global growth.