Charles Schwab: Stocks Benefiting From Jobs Report, Goldilocks Return

Fears about rising inflation evaporated somewhat Friday after the payroll report showed little growth in wages. That has resulted in the return of the Goldilocks environment, in which the economy isn’t too hot or too cold, says Charles Schwab‘s chief investment strategist Liz Ann Sonders. In a blog post, Sonders said that, excluding the market correction in February, a Goldilocks environment has been playing out for much of the recent economic expansion. And while it appeared to be ending, the payroll numbers Friday ushered it back in.

Non-farm payroll growth of 313,000 jobs was higher than the 205,000 the markets were looking for in February, but wage growth wasn’t up at the same rate, lessening concerns that inflation was rising. That brought back the environment where the economy isn’t too hot or too cold and thus sent stocks surging. “The muted wage gains for Main Street tend to get cheers from Wall Street because tame wage growth can keep inflation from accelerating and keep a lid on the number of rate hikes by the Federal Reserve,” wrote Sonders in the blog post. The executive from The Charles Schwab…

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