ANALYSIS: Retail takes a hit in disappointing jobs report

— -- This was a disappointing jobs report.

Hiring slowed dramatically in March, with the U.S. economy creating just 98,000 jobs, about half of the 180,000 economists were forecasting. It was also the weakest job creation since May 2016.

Moreover, the January and February numbers were revised lower by a combined 38,000 jobs (in January the economy created 216,000 jobs, not 238,000; while in February the number was 219,000, not 235,000).

The bright spot was the unemployment rate itself, which continues to drop. In March, the unemployment rate fell from 4.7 percent to 4.5 percent, the lowest level since May 2007. Economists believe an unemployment rate between 4-5 percent represents full employment – as in, anyone who wants a job has one.

March also marks the 78th consecutive month of job growth – the longest since official record keeping began in 1939. Lindsey Piegza, chief economist at Stifel Fixed Income, called the March report "a mixed bag.”

One glaring trend forming in the data is the weakness in retail jobs. In March, retail lost 29,700 jobs. In February, the industry lost 30,000.

You can call it the Amazon effect, or the impact of automation, but it’s clear retail is facing major pain right now and that pain is likely to continue with more bankruptcies and store closures.

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And what might this weakness in retail mean for the border adjustment tax? Many believe the tax would hit retailers hardest, especially apparel retailers who import the majority of their goods.

This jobs report also calls into question some of the recent softer data, showing businesses and consumers feeling optimistic. Does that optimism translate into action? Investing in your company, hiring more workers, or consuming more things? Maybe not.

And while average hourly earnings are still rising, up 5 cents in March to $26.14, the amount earnings are growing by is slowing down.

Some analysts believe the major storm on the East Coast in March skewed some of the figures and are waiting to see what happens in the April data. Construction, for example, which gained 59,000 jobs in February, added just 6,000 in March. Were they off because of the blizzard? Or is demand for new construction slowing - a sign that the economy is also slowing?

Investors are taking a wait-and-see approach.