The May jobs report is out tomorrow at 8:30 a.m. Eastern. While temporary census workers will bloat the results, the expectations of 500,000 new jobs seems to me to be unrealistically high. Even decent growth could undershoot that by a wide margin. The significant number won't be in the headline however, but the true measure of job growth will be private sector employment. In April, private sector employment grew by 231,000, a figure that is both subject to revision and a measuring stick for May.
Healthy and consistent job growth is a precondition to eventual Federal Reserve interest rate hikes, but with European debt issues and potential impact on the global economy as cover, the Fed remains on indefinite hold.
The Federal Open Market Committee's counterpart to the north, the Bank of Canada, initiated interest rate hikes this week by pushing their benchmark rate from 0.25 percent to 0.5 percent. Forecasts call for the Bank of Canada to continue pushing rates higher in quarter-point baby steps through the balance of the year. Of course, the Canadian economy grew by 6.1 percent annualized in the first three months of 2010, nearly double that of the U.S. But hey, at least someone is staying ahead of the curve by beginning to raise rates.