Investors will be looking to May’s nonfarm payrolls report for more clarity on whether the Federal Reserve can ease up in its battle against inflation.

Economists surveyed by Dow Jones expect the Bureau of Labor Statistics to report that the U.S. economy added 190,000 more jobs on the month, which would be a slight step up from the 175,000 gain in April.

Moreover, markets will be taking a close look at wage numbers, as average hourly earnings are expected to show a 0.3% increase, slightly higher on the month, putting the 12-month increase at 3.9%, or the same pace as previous and an indication that the central bank still has more work to do.

Other employment indicators this week showed a deceleration in private payrolls growth, as ADP reported growth of just 152,000, and a slight uptick in the pace of initial filings for unemployment benefits.

“The jobs report for May is now particularly consequential,” Citigroup economist Andrew Hollenhorst said in a note. “A weaker reading [of less than 175,000 jobs and an unemployment rate of 4% or more] would be a final piece of evidence that the slowdown will continue. On the other hand, an unexpected strengthening would reinforce the idea that there is no urgency to cut rates and send Treasury yields higher again.”

Citi expects that the report will show just 140,000 jobs, with the unemployment rate hitting 4% for the first time since January 2022.

If that’s the case, it could give the Fed impetus to cut interest rates sooner than expected.

Markets currently are pegging the first rate cut to come in September, with one more on the way in December. Citi is below consensus on its jobs outlook and by far the most out-of-consensus Wall Street view on rate reductions, with an expectation the Fed will start in July and keep going with four reductions by the end of the year.

However, Goldman Sachs also expects a below-consensus 160,000 gain in payrolls as it sees seasonal adjustments holding back job growth. However, the firm also anticipates that an extra pay week in the month to offset some of the seasonal distortions.

On wages, Goldman is mostly in consensus, keeping gains at a rate that Fed officials say is inconsistent with its 2% inflation target.

The BLS will release the report at 8:30 a.m. ET.