The Labor Department's latest employment report has numbers that both optimists and pessimists can love. And love to hate.

Unemployment at a 16-year-low of 4.3% in May? That looks like good news for the U.S. economy. Job gains that were 22% less than economists expected, coupled with a cut of 66,000 to growth estimates for the previous two months? Not so much.

So what's the bottom line for a U.S. central bank that wants to move interest rates closer to historical norms from a low near zero? The data may not derail a widely expected June hike of 25 basis points, but it won't make backing the move any easier for members of the Federal Reserve's monetary policy committee who are meeting in about two weeks.

"At this point, June is still a lock," Joseph Song, a Bank of America economist, said in a telephone interview. "If they were willing to overlook the weak data since March -- weak inflation and tenuous consumer data -- I think they're going to be willing to overlook one weak employment report."

Still, reports on inflation and and retail sales are scheduled on the second day of the Fed's June meeting and if they, too, prove lackluster, "it does raise a risk that they'll have to consider whether or not they're going to go in June," Song said.

While the May jobs data alone --  which showed just 138,000 new positions -- could be dismissed as transitory, it looks more ominous when combined with other recent economic indicators, Song said. Those include lower-than-expected retail sales in April, a disappointing automobile market and core inflation of 1.5%, stubbornly below the Fed's target of 2%.

Further, the three-month average for job growth has fallen to the 120,000 range from the 150,000 range, he said. The Labor Department slashed reported gains for April to 174,000 from a previous estimate of 211,000, and trimmed growth in in March -- already a laggard -- to 50,000 from a previous report of 79,000.

"Each one thing isn't a terrible sign, but all taken together, it's a bit troubling," Song said.

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Trading in interest-rate futures still indicates an 88% chance of a 25 basis-point hike on June 14, down less than a percentage point from yesterday. An increase would be only the fourth since the 2008 financial crisis -- when rates were cut to nearly zero -- taking them to a range of 1% to 1.25%. 

The monetary policy committee had previously signaled at least two more hikes this year after a March boost, pushing short-term rates to 1.25% to 1.5% and buoying banks from JPMorgan Chase (JPM) - Get Report to Bank of America (BAC) - Get Report, which typically benefit from passing increases on more quickly to borrowers than to depositors.

Committee members who still support following through can back up their position not only with lower unemployment but with a 4-cent gain in hourly wages, which reached $26.22, and a 34% decline in the number of people who want jobs but have given up on finding them.

Indeed, Goldman Sachs (GS) - Get Report predicts the June hike will go forward as planned, but the weaker employment gains helped convince U.S. economist Jan Hatzius that the Fed is unlikely to approve a second increase before December or to begin trimming its $4.5 billion balance sheet before September.

The central bank's portfolio quadrupled to that level after the financial crisis as it bought government debt and mortgage-backed securities to inject liquidity into a weakened economy that was insufficiently buoyed by near-zero interest rates. While the strategy was successful, the Fed has drawn criticism for becoming too involved in global financial markets while giving Corporate America incentives to load up on cheap debt.

Reversing so-called quantitative easing would also help the central bank to skirt complaints over its payment of above-market interest rates on foreign lenders' deposits.

To trim its holdings to traditional levels, Fed officials have said they expect to use a system of gradually escalating caps that would protect markets from concern about how quickly liquidity would evaporate. "The caps would initially be set at low levels and then be raised every month," according to minutes of the Fed's May meeting

During the first year of what might be termed quantitative tightening, the Fed will probably increase its caps from $10 billion a month to $40 billion a month, or as much as $480 billion a year, Morgan Stanley economist Ellen Zentner said in a note to clients in May. 

The effects of the first year of the Fed's plan, if $300 billion in securities roll off, would be the equivalent of boosting short-term interest rates by 35 basis points, she estimated. In comparison, each of the central bank's three rate hikes since the financial crisis have been 25 basis points.

How Friday's tepid jobs data will affect that potential strategy remains to be seen. For now, it will merely "fuel the ongoing debate among Fed officials, perpetuating the proverbial $4.5 trillion question in the market right now: Will they or won't they raise rates just twelve days from now?" Lindsey Piegza, chief economist at Stifel's fixed-income business, said in an e-mailed statement. 

Editors' pick: Originally published June 2.