Morning Note: Jobs Data Outweighed by Oil

The jobs report may have been the big news Friday morning, but the Fast Money traders had already shifted their focus to energy.

Rising oil prices had captured the markets and the FM crew’s attention – weighing down enthusiasm from a jobs report that largely met Wall Street’s expectations.

“I think your problem today is going to be oil,” said Joe Terranova, Virtus Investment Partners Chief Market Strategist. “I am seeing some decent end of the week buying.”

WTI Crude futures for April delivery were climbing past $103 per barrel Friday morning after selling off yesterday on reports of a coming resolution to the Libyan crisis. Libyan leader Muammar Gaddafi reportedly agreed to mediation yesterday with anti-government protesters, brokered by Venezuelan President Hugo Chavez. The state of such mediation, however, was unclear Friday as hundreds of anti-government protesters marched in Tripoli Friday shouting “Gaddafi is the enemy of God,” according to reports.

Brent crude futures were also returning to their monthly highs. Brent Crude hit an intra day high of $116 per barrel Friday morning.

Higher oil prices threaten equities and future employment by cutting into corporate margins. If corporations face reduced profitability from higher input costs, they are less likely to want to add relatively pricey employees. That’s one reason why oil stole the spotlight Friday from the Labor Department’s unemployment report.

The Department of Labor said Friday that the U.S. added 192,000 jobs in February, roughly in line with expectations. The unemployment rate ticked lower to 8.9% from 9%. In another encouraging sign, the DOL also revised January’s disappointing jobs number upward from 36,000 to 63,000.

Not all was rosy in the jobs report, however. The average workweek was roughly unchanged and wage growth barely ticked upward. That data was particularly disheartening in light of yesterday’s productivity data, which showed productivity was up 2.6% as businesses did more with the same number of employees. The ability of businesses to continue to increase output without increasing wages or the workweek may make it less likely that they will feel pressure to add new workers.

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