Experts say that the US economy was not expected to create so many new jobs this year, but many companies have been hiring employees to support stable economic expansion.

On Friday, Beijing time, the US will release non-farm payroll data for June. The market expects an increase of 200,000 non-farm jobs in June, lower than 272,000 in May.

Even if hiring slows down as expected, such growth is still quite good historically. In the decade prior to the COVID-19 pandemic, the US economy added an average of 183,000 new jobs per month.

However, not everyone believes in this report. Richard Moody, chief economist at Regions Financial, pointed out that the government's employment survey has not been accurate since the outbreak of the pandemic. The non-farm payroll report often overestimates the initial estimate of new job openings. Subsequent revisions often show that fewer job opportunities were actually created. Moody said, "We do not believe that the job market is as vibrant as the overall employment growth data suggests."

Other economic surveys also suggest that hiring may be slowing down. ADP's report released on Wednesday, also known as the "little non-farm", showed the smallest private sector job growth in five months; the employment index in the June ISM Services Index was negative for the fifth consecutive month; the number of initial unemployment claims has risen to a three-year high, indicating that unemployed individuals need more time to find new jobs.

Rising unemployment is another indicator that the labor market is cooling off. In May, the unemployment rate climbed to 4% for the first time in 28 months, up slightly from just over 3.4% in the same period last year. The market expects the unemployment rate to stabilize at 4% in June.

However, some economists believe that the increase in unemployment may not be as serious as it seems. They point out that the young workers aged 16 to 24 contribute the most to the increase in US unemployment rate, and their employment situation is difficult for the government to grasp. The unemployment rate for this group jumped from 7.3% in January to 9.2% in May. By comparison, the unemployment rate for middle-aged workers remained at the low level of 3.3% in January.

In terms of wage growth, the market expects average hourly wage to increase by 0.3% in June, but this is still too high for the Fed. In a low inflation environment, wages often rise by only 0.1% to 0.2% on a month-on-month basis.

However, wage growth in the past year may slow from 4.1% to 3.9%, hitting the lowest level in three years. The Fed believes that a wage annual growth rate of no more than 3% is consistent with low inflation.

For this non-farm payroll data, Fed officials hope to see further cooling in the labor market. The high demand for labor after the pandemic and the resulting surge in worker wages have made it more difficult for the Fed to control inflation.

If inflation data continues to decline as it did in May, the Fed may cut interest rates as early as September. A strong employment report may not make them "more hawkish", but a weak report will support their reasons for cutting interest rates in September.