The U.S. economy is not collapsing. At least, that is our general read on the most recent jobs report. The market, however, remains volatile. But that doesn’t mean you should stay on the sidelines. Rather, it is time to start looking for breakout stocks to buy for an explosive summer stock rally. 

Let me explain…

Last Friday, the March jobs report was released, and it was surprisingly strong. Following the meltdowns of Silicon Valley Bank and Signature Bank, pretty much everyone was braced for a collapse in March hiring. But the jobs report showed that strong hiring trends continued in March. 

The U.S. economy added 236,000 jobs in the month, better than the 230,000 expected by economists. To be sure, that is the weakest job creation number since December 2020. But thanks to protracted pandemic aftershocks, we have been running “above-trend” on job growth for about two years. March’s pace of hiring (over 200,000 new jobs) is largely consistent with healthy pre-pandemic levels. 

Importantly, it is not consistent with an imminent recession. Rather, it is consistent with a fairly healthy U.S. economy. 

The Economy Remains Fairly Strong

The rate of job growth is finally returning to normal pre-pandemic levels for the first time since COVID-19 emerged.

And while the bedrock of the U.S. economy – the labor market – continues to grow, one of its biggest economic headwinds – inflation – continues to recede. 

Average hourly earnings rose just 0.3% month-over-month in March. Year-over-year, wages rose 4.2%. That is down 40 basis points from the 4.6% wage growth reported in February. 

At that pace, wage growth inflation will be back to “normal” by the summer. 

In short, we have a U.S. economy that is perfectly threading the needle right now between inflation and recession risks. Inflation is collapsing quickly, yet the labor market remains too strong for a recession to be imminent. 

Falling inflation without a recession? That is a recipe for further stock market strength. 

I say “further” because stocks are already off to a strong start in 2023. Inflation rates have fallen, and the economy has continued to expand. 

Indeed, in the first quarter of the year, tech stocks notched their best quarterly performance since Q2 of 2020 (when they were rebounding from the pandemic crash).

That was the best quarter for tech stocks since Q2 of 2009 (when they were rebounding from the 2008 financial crisis). And that was the best quarter since late 2002 (when they were rebounding from the dot-com crash). 

The Final Word on Finding the Best Breakout Stocks to Buy

Today’s price action is consistent with big recoveries. And last Friday’s jobs report seems to confirm that bullish price action. The weakness in April is nothing more than a buying opportunity. 

So tomorrow we are issuing some brand-new “buy alerts” for our Breakout Trader portfolio. Breakout Trader, for those unaware, leverages a complex mathematical algorithm to identify the fastest, most explosive stocks in the market at any given time. 

Trust me; you do not want to miss these stock picks. 

When we buy stocks in our Breakout Trader portfolio, they tend to break out in a hurry. With inflation crashing, recession risks receding, and financial stress measures spiking, the market is finally getting the potent combination it needs for our stocks to soar. 

Gain access to those new, potentially explosive picks here.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.