At 8:30 a.m. Eastern time, the Labor Department will report the figures on hiring and unemployment in May.
The average monthly job gains in 2016 have so far fallen shy of the nearly 240,000 average of the last two years, slowing to 160,000 in April. The consensus is that May’s figure will be a comparable increase.
Unemployment is expected to tick down to 4.9 percent.
This is what you should watch for:
How will the Fed read the numbers?
For weeks, Janet L. Yellen, the Federal Reserve’s chairwoman, and other Fed policy makers have been signaling their intent to raise interest rates before the end of the summer. Meetings are scheduled for mid-June, late July and September, so the question is how soon.
Some Fed officials have said they think the economy is already strong enough to raise rates. As John Canally, chief economic strategist for LPL Financial, noted, a few have indicated that “job growth as low as 100,000 a month is enough to tighten the labor market.” Other officials have said they see no reason to rush.
Daniel K. Tarullo, a Fed governor who sits in the second camp, said Thursday in an interview with Bloomberg that he was still looking for “an affirmative reason to move.”
Any number over 200,000 is likely to nudge the Fed to move sooner rather than later.
Will the Verizon strike skew the picture?
Whatever figure the Labor Department reports will probably seem weaker than it is in reality because more than 35,000 Verizon workers were on strike throughout May. (They returned to work this week.) Although Verizon hired some temporary replacements, the total would not offset the number who walked out. Goldman Sachs researchers have said they expect the strike to show up in two categories in the payroll report: specialty trade contractors, a component of the broader construction, and telecommunications, part of the information services.
Are wages improving?
For most of the recovery, wages remained stagnant, stubbornly resisting any upward motion despite the fall in the unemployment rate. But average hourly earnings have been inching up this year and staying ahead of the pace of inflation. Most analysts expect that trend to continue with a gain of 0.2 percent to 0.3 percent in average hourly earnings. A survey by the National Federation of Independent Business found that more small business owners “reported that they are raising compensation, including higher pay and more benefits” and “that compensation reports are at the highest level since 2007.”