Nonfarm payrolls forecast to have increased 190,000 in May
Unemployment rate expected to rise to 3.5 from 3.4
Average hourly earnings seen gaining 0.3; up 4.4 yy

WASHINGTON, June 2 Reuters U.S. job growth likely slowed in May, with wages coming off the boil, potentially allowing the Federal Reserve to skip an interest rate hike this month for the first time since embarking on its aggressive policy tightening campaign more than a year ago.

Nevertheless, the Labor Department39;s closely watched employment report on Friday is expected to still show the labor market remaining tight. The unemployment rate is forecast climbing to 3.5 from 3.4 in April but the report will confirm that the economy remained far away from a dreaded recession, though more pockets of weakness are emerging.

The jobs report is likely to show another step down in the pace of growth, but still a very strong labor market, said Bill Adams, chief economist at Comerica Bank in Dallas. The Fed is under less pressure to raise interest rates at its meeting this month, than at any time over the last year and a half.

The survey of establishments is likely to show nonfarm payrolls increased by 190,000 jobs last month after rising 253,000 in April, according to a Reuters survey of economists.

It would mark a slowdown from the monthly average of 285,000 in the first four months of this year, but stay well above the 70,000100,000 needed per month to keep up with growth in the workingage population.

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