Tomorrow's Macro Roadmap: Japan wages / RBA, ECB & BOE speak / Canada & US labour market reports
In Japan, wage growth is expected to accelerate. The wage data is the BoJ's key input: accelerating cash earnings toward +3.4% on shunto wage round pass-through bolsters the wage-driven inflation case for a June hike (15–16 June), even as real spending remains negative. Dovetails with the reporting yesterday that the BoJ is set to weigh a quarter-point move.
The main event today will be the US non-farm payroll release for May at 14:30 CET. Consensus for total payrolls stands at 85,000, down from 115,000 in April, with private payrolls also seen increasing by 85,000, down from 123,000 previously. The unemployment rate is expected to hold steady at 4.3%, while average hourly earnings are forecast to rise 0.3% month over month and 3.4% year over year. The latter will be important to watch as the Fed assumes that the breakeven job growth to keep the unemployment rate has fallen in recent years, according to some Fed studies.
The number of jobs the US economy must add each month just to hold the unemployment rate steady — "breakeven" employment growth — has collapsed, and the major Federal Reserve estimates now cluster near zero. The Federal Reserve Board puts it at 155,000 a month in 2023–24, when net immigration was surging, falling to roughly 85,000 in 2025 and to under 10,000 — essentially nil — in 2026, as potential labour-force growth slows to a pace it calls unprecedented in recent history (Fed Board). The Dallas Fed draws an even steeper line: breakeven peaked near 250,000 in 2023, dropped to about 10,000 by July 2025, and actually turned negative, averaging roughly −3,000 a month from August to December 2025, as unauthorised-immigrant outflows and falling participation shrank the workforce — yet job growth still edged above that floor into early 2026, leaving the jobless rate steady (Dallas Fed). The San Francisco Fed reaches the same conclusion from the other direction, noting that monthly job gains have faded from about 166,000 in 2023–24 to near 17,000 since mid-2025 and arguing that, with the labour force barely growing, payroll counts alone no longer measure labour-market health — the unemployment rate, the employment-to-population ratio, and the quit and hire rates do (SF Fed). The Kansas City Fed traces the decline to the same two forces, slower immigration and an ageing population (Kansas City Fed), while the St. Louis Fed stresses how wide and uncertain the 2026 estimates have become. (St. Louis Fed)
A payroll number above the breakeven rate should, in theory, exert upward pressure on wages and make the case for a Fed rate hike more likely.
Good luck, and feel free to ping me in the chat to discuss markets and views!