The official May US jobs report tomorrow is the key focus for Wall Street as the guessing game about the timing of a potential downward adjustment to the Federal Reserve's quantitative easing program remains centre stage.
With the next two-day Federal Open Market Committee meeting starting on June 18, tomorrow's government payrolls data is expected to provide direction to the FOMC's attitude toward tapering its US$85 billion a month bond-buying program.
Employers probably added 170,000 jobs to their payrolls in May, according to a Reuters survey of economists, while the median forecast in a Bloomberg survey calls for an increase of 165,000 jobs. The unemployment rate is expected to stay at 7.5 per cent.
A Labor Department report today showed that initial claims for state unemployment benefits declined 11,000 to a seasonally adjusted 346,000 in the week ended June 1. A report yesterday showed private employers added 135,000 jobs in May.
"The US labour market is still improving steadily, just not at a strong enough pace to warrant Fed tapering yet," Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, told Reuters.