Strong Employment Report May Ignite Inflation

Sep. 1.06 | About: The United (USO)

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

AHEAD OF THE TAPE: Data Deluge

  • Summary: The old conventional wisdom among economists was that 180,000 jobs were needed to be created each month just to keep up with the new people entering the workforce; but as the labor force growth has slowed, the new conventional wisdom reduces that figure to between 100,000-120,000 new jobs per month. Economists project that today's jobs reports will show that 130,000 new jobs were created in August, up from 113,000 in July. The concern here is that stronger job growth will heat up the economy and fuel inflation.
  • Comment on related stocks/ETFs: If job creation is too strong for Wall Street's taste, look for the catalyst to shift to oil. Will declining oil prices be enough to offset job growth concerns? Focus will shift to the Fed to see if they feel the need to raise rates.