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JOBS REPORT — What you need to know in markets on Friday

Myles Udland
Markets Reporter

June will kick off on Friday with the U.S. jobs report.

The Bureau of Labor Statistics’ employment situation report for the month of May is expected to show 190,000 jobs were added to the economy in May with the unemployment rate expected to stay put at 3.9%.

Economists will also be closely watching wage data, with average hourly earnings expected to rise 0.2% over last month in May and 2.6% over the prior year.

Recall that in April headline job gains disappointed, with nonfarm payrolls expanding by 164,000, about 30,000 below expectations.

Daniel Silver, an economist at JP Morgan, said in a note Thursday that he expects 250,000 jobs were crated in May, citing low unemployment insurance claims during the reference week for the May report as well as a potential tailwind from good weather during May.

Over at Goldman Sachs, economists forecast that nonfarm payrolls grew by 205,000 in May, writing in a note Thursday that, “while labor supply constraints often weigh on May job creation when the labor market is beyond full employment, we believe strong jobless claims data, rebounding business surveys, and a return to normal weather suggest a pickup in payroll growth in [Friday’s] report.”

On Friday morning, markets will get a crucial update on the state of the U.S. labor market with economists forecasting another month of strong job growth.  (AP Photo/Andres Leighton)

Also on the economic calendar, we’ll get the May reading on auto sales — which are expected to total an annualized rate of 16.7 million in May — as well as manufacturing readings from ISM, Markit Economics, and Construction spending for the month of April.

Markets will also look to start June off on a better foot than they ended May, as each of the major U.S. indexes lost ground Thursday with the Dow taking the biggest hit.

The blue chip index lost more than 1%, or 251 points, after the Trump administration announced it would place tariffs on steel and aluminum imported from Canada, Mexico, and the European Union. The S&P 500 lost 0.7%, or 18 points, while the tech-heavy Nasdaq saw the slimmest losses with a 0.3%, or 20 point, decline.

And then on the earnings side on Friday, notable companies reporting earnings should include Abercrombie & Fitch (ANF) and GameStop (GME).

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland