The stronger-than-expected start this year for job creation could be in for a reality check when the Bureau of Labor Statistics releases the May nonfarm payrolls report Friday.

Economists surveyed by Dow Jones expect the employment rolls to show that just 80,000 jobs were added during the month, which would mark a notch step down from the average of 150,000 from the prior two months, including 115,000 in April.

Moreover, some prominent Wall Street voices think the month could feature some catch-up for a labor market that was teetering at this time last year, with risks to the downside for the headline number.

“We’re continuing to hear and see the low-hire, low-fire sentiment, which is that if you have a job, it’s OK right now,” said Laura Ullrich, director of economic research at Indeed Hiring Lab. “People are continuing this kind of job-hugging trend. But if you’re looking for a job, it’s a very hard time to find a job because hires are so low.”

Ullrich added that she “wouldn’t be surprised” if the May number comes in at or below consensus. BLS data earlier this week showed a surprise jump in job openings for April but the level of those quitting their jobs is at its lowest since the Covid pandemic era in August 2020. The consensus sees the unemployment rate holding steady at 4.3%.

“From a macro point of view, we’re going to see stagnation, because if people aren’t leaving jobs and they’re not creating new jobs, it’s just a quite stagnant market,” she said.

Around Wall Street, expectations are muted as economists expect that mild weather and other seasonal factors helped boost the prior numbers other than in February, which saw a decline of 156,000 — the only negative month of the year.

There also are signs of elevated layoffs.

May saw a total 97,006 planned reductions, a 16% increase from April and the highest total for the month since 2020, when the Covid pandemic saw massive job cuts, according to Challenger, Gray & Christmas. The highest May prior to that was in 2009, around the nadir of the global financial crisis. Moreover, the firm said artificial intelligence-related announced job cuts totaled 38,242, the highest single-month total since Challenger began collecting the data about three years ago.

Initial jobless claims last week posted their biggest total since early February.

Goldman Sachs is expecting payroll gains of just 60,000, noting that “big data indicators of job growth we track slowed” during the month. Vanguard chief economist Adam Schickling is forecasting a mere 20,000 “as we expect a partial unwind from the strong [January]-April jobs numbers that were biased by unseasonably warm and dry weather.”

Likewise, EY-Parthenon is expecting growth of 50,000, which according to most estimates now is enough to keep the unemployment rate little changed from its current level, with perhaps a slight upside bias.

“The step down reflects some payback from earlier weather-related strength and a still-cautious hiring backdrop,” Gregory Daco, the firm’s chief economist, said in a note. “We expect the unemployment rate to edge higher to 4.4%, consistent with a labor market where labor demand and supply have slowed in sync.”

From a policy perspective, anything around the consensus is almost certain to keep the Federal Reserve on hold, as it has been all year. Markets are pricing in almost no chance of a move at the June 16-17 meeting of the Federal Open Market Committee. In fact, expectations are that the Fed pause will last through the year, with chances increasing of an interest rate hike in early 2027 if inflation continues.

“For the Fed, a stable labor market alongside still-elevated inflation raises the odds of a more hawkish, two-sided policy statement at the next FOMC meeting,” Daco said. “Officials are likely to emphasize that rate hikes would remain on the table if inflation proves more persistent.”