(Bloomberg) -- Forecasters expect a monthly report on US employment to show strong job growth continued in April, even as wage pressures kept moderating.

The figures, to be published Friday by the Bureau of Labor Statistics, will probably show employers boosted payrolls by 240,000 last month, according to the median estimate in a Bloomberg survey. Average hourly earnings likely advanced 4% over the last 12 months, which would mark the slowest pace of increase in almost three years.

Robust employment gains coupled with slowing wage growth would support the Federal Reserve’s wait-and-see approach on interest rates as officials ponder whether lower borrowing costs will still be appropriate in 2024 following higher-than-expected inflation readings in recent months.

“Another upside surprise to payrolls would further the recent narrative of few or no rate cuts from the Fed,” Citi economists Veronica Clark and Andrew Hollenhorst wrote in an April 30 note previewing the numbers. “But Fed officials have been downplaying any hawkish reaction to stronger employment, and a downside surprise to employment would lead to a sharp pricing-in of more Fed rate cuts.”

Here’s what to watch for in key components of the report:

Nonfarm Payrolls

While economists generally see payroll gains stepping down in April from the first quarter’s booming pace, a 240,000 increase would still be above the average pace over the second half of 2023 — and is the most optimistic estimate since October 2022. Many have cited surging immigration as a reason why employment growth remains so strong even at a point in the business cycle when it would be natural to expect slower hiring.

“Elevated immigration boosted labor supply by roughly 80k per month last year, relative to normal, and we expect a continued tailwind averaging 50k per month this year,” Goldman Sachs economist Spencer Hill wrote in a May 2 note. “Given the still-elevated level of job openings and the ramp-up of the spring hiring season, we assume many of these individuals found jobs during the April survey period, including in the construction and leisure sectors.”

Hourly Earnings

Forecasters expect average hourly earnings rose 0.3% in April, similar to March’s increase. That would bring the year-over-year rate to 4%, which would represent the smallest 12-month increase since June 2021.

Recent minimum-wage increases in California may present upside risks, though estimates of the impact vary widely. Bloomberg Economics sees the Golden State’s wage hike for fast-food workers contributing to an above-consensus 0.4% increase in average hourly earnings.

Labor Force

Economists expect both unemployment and labor force participation remained unchanged in April at 3.8% and 62.7%, respectively. Beneath the headline figures, one key figure to watch is the Black unemployment rate. It jumped to 6.4% in March, matching the highest level in more than two years.

While Black unemployment tends to be more volatile than overall unemployment, it’s also often seen as a leading indicator of the broader trend.

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