Analysis by Dr. Nancy Yamaguchi


Crude oil prices have recovered the $49 per barrel (/b) level, and the recent price retreat appears to have leveled off. Today’s strong Jobs Report signals continued consumer optimism and economic expansion.


The Employment Situation Report, also known as the Jobs Report, for July has just been released by the Bureau of Labor Statistics (BLS). Total nonfarm payroll employment increased by 209,000 in July, outperforming market expectations of 180,000 new jobs. The unemployment rate declined to 4.3% from 4.4% the month prior.


Wages increased by 0.3% over last month. Slow wage growth has been a continual issue, with the pace of growth averaging only around 2.5% per year over the past two years. Some economists now predict that the low rate of unemployment will finally move wages up, as near-full employment forces employers to raise wages in order to keep employees.


The Jobs Report is a strong one, but to place the results in context, President Trump’s campaign promise of adding 25 million jobs over 10 years would require job growth of 208,333 per month. It is possible that planned restrictions on immigration will reduce the labor force in coming years.


Consumer confidence in the overall economy remains at high levels. The U.S. economy has been in a period of sustained—though moderate—expansion. The Dow Jones has hit record-highs, and key stocks bounced back after the release of the Jobs Report.


The U.S. Dollar weakened, U.S. stocks fell, and U.S. Treasuries rose upon the news that Special Counsel Robert Mueller has impaneled a grand jury in the ongoing investigation of Russia’s interference in the 2016 elections. Also at issue is whether there was collusion between Russia and the Trump campaign. President Trump has dismissed the charges as fabrication and fake news, stating, “There [were] no Russians in our campaign, there never were.”


The markets have been surprisingly complacent about multiple and ongoing conflicts within the Trump White House, with many parties simply seeming to assume that the economy will continue on its slow-but-steady upward course.


West Texas Intermediate (WTI) opened at $48.95/b, up by 79 cents from yesterday’s opening. As of approximately 9:00 a.m. EDT, WTI prices were $49.03/b, up by 8 cents since today’s opening.