Jobs Report: What to Watch For

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Struggling Sectors

Once the recovery took hold, the retail sector could be depended on to churn out more jobs. But it has disappointed in 2017. After two months of heavy losses, the sector added a mere 6,000 positions in April, and the outlook is grim. This week, the fashion company Michael Kors announced that it would close 100 to 125 stores in the next two years.

“Retail isn’t dying, but traditional retail is dying,” said Dan North, chief economist at Euler Hermes North America. “There is creeping Armageddon for brick and mortar.” Another round of big losses in May would suggest the pace is quickening.

Construction hiring was also anemic in March and April, but Mr. North attributed that to bad weather. Given the demand for new housing, analysts are expecting the sector to rebound. “If we don’t,” he said, “then something else is going on.”

The Unemployment Rate

Not all increases are created equal. Although grinding down the jobless rate is generally the goal, a rise in unemployment can be a positive sign — if it is for the right reasons. One of those would be that people who dropped out of the work force are finally encouraged enough to re-enter it. New graduates could also increase the number of job hunters in May.

“A lot of students are leaving school, so I would expect it to tick up a little,” said Beth Ann Bovino, United States chief economist for S&P Global Ratings.

Wage Growth

With the official unemployment rate so low, two factors guide the debate over whether the labor market is operating at full capacity: the proportion of adults in the labor force, and wage growth. Josh Wright, chief economist at iCims, a human-resources software provider, said this may not be the month to break the slow-growth trend for wages because of the way the calendar falls.

The Labor Department ordinarily conducts its survey on the 12th of the month, which in May was a Friday. That means any wage increases scheduled to take effect on the 15th — a common payday — were not included in this month’s report, because they occurred in the next week.

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