Economists see almost a 40 percent chance that the Federal Reserve will delay an interest-rate increase beyond September if jobs gains stumble or inflation fails to move higher, according to a Bloomberg News survey.

“If labor markets for some reasons stalled out, you would get a delay,” said Michael Gapen, chief U.S. economist at Barclays Plc in New York, who places about a two-thirds probability of a rate rise in September. “I think labor market conditions justify a move.”

Fed officials weighing the timing of the first rate increase since 2006 are parsing the latest data to determine whether a first-quarter contraction was a harbinger of longer-lasting weakness in the world’s largest economy. Stronger-than-forecast payrolls growth in May helped ease their concerns without erasing them.

Economists surveyed June 5-9 put the probability of a September increase in the benchmark federal funds rate at 50 percent, according to the median estimate. The odds were nine percent for October, 20 percent for December and 10 percent for some time in 2016.

Some investors making bets on interest-rate futures have a more hawkish view. The market-implied probability of liftoff by September is somewhere between 93 percent and 100 percent, according to Stan Jonas, who has been trading fed funds futures since he helped create them in 1988.

The Federal Open Market Committee gathers on June 16-17, and Chair Janet Yellen will hold a press conference after the meeting. Fed officials will also publish updated quarterly economic and interest-rate forecasts.

Yellen Speech

In March, those forecasts showed that most officials expected to raise rates in 2015. Yellen, speaking on May 22, said she still thought it would be appropriate to act this year, if the economy continued to improve as she expected.

Economists in the survey saw a slowdown in labor markets as a key reason why the Fed might delay liftoff. That was closely followed by the risk that inflation might fail to move back toward the central bank’s 2 percent goal.

Economists also expect Fed officials to show a slower pace of rate increases in their “dot plot” chart of estimates for the path of the benchmark federal funds rate over the next several years.

Two Increases

The rate will rise to 0.625 percent by the end of 2015, according to the survey, matching the forecast of the FOMC in March and signaling two rate increases this year.

The survey shows the rate rising to 1.625 percent at the end of 2016, lower than the FOMC’s March forecast of 1.875 percent. Economists predicted 2.94 percent at the end of 2017, versus 3.125 percent seen by the FOMC.

“The dot path should come down,” said Ward McCarthy, chief financial economist at Jefferies LLC. “They have signaled this is not going to be a Greenspan-esque tightening,” he said.

In 2004, then-Fed Chairman Alan Greenspan began a campaign of quarter percentage-point rises that ran for 17 consecutive FOMC meetings.

Yellen on May 22 said the pace of tightening “is likely to be gradual” and that it could be “several years” before the federal funds rate is back to its longer-run level.

Long Run

Fed officials put that level at 3.75 percent in March. That estimate could fall about a quarter point, to 3.5 percent, according to the median estimate in the survey.

Employers added 280,000 jobs in May, the most in five months. An increase in the number of people entering the labor force pushed the unemployment rate up to 5.5 percent from 5.4 percent.

“We may need an unemployment rate close to 5 percent before we begin to see more significant increases in wages that are broad based,” said Lynn Reaser, chief economist at Point Loma Nazarene University in San Diego.

More than two thirds of economists polled by Bloomberg News said unemployment would have to decline into a range of 4.5 percent to 5 percent to push gains in average hourly earnings up to the 3 percent level.

Hourly earnings for production and non-supervisory workers have averaged 2.1 percent in the current expansion, which began in June 2009, compared with 3.1 percent in the last expansion. Fed officials cite low wage growth as a sign of slack in the labor market.

Economists see little risk that inflation will be at or breach the Fed’s 2 percent target this year. Prices as measured by the Fed’s preferred gauge rose 0.1 percent in April from a year earlier, and gains have languished below the target since April 2012.

Some 23 percent of economists in the survey said three consecutive months of inflation at 2 percent or higher could happen in the first quarter of 2016, while 25 percent said it could happen in the second quarter of that year. Some 35 percent said it wouldn’t happen until after 2016.