Job creation and wage growth are two factors that could help us predict the likelihood a recession.

The June jobs report will be the first release in a busy, busy month of data and events. With talk of a slowing economy and possible recession on the horizon, the pace of job creation will tell us plenty regarding the present health of the economy. If we produce enough jobs, more consumers will be spending, and a recession is much less likely.

With the economic focus squarely on the issue of inflation, the growth of wages in June may take as much importance as the growth in jobs. Actually, the two numbers are related. The lower the unemployment rate, the greater the competition for workers. If you can’t find enough workers, you are likely to bid for their services.  If the Fed sees wage growth higher than expected, we are likely to see another significant increase in short-term interest rates at the end of July when the Fed meets.

And as we have counseled previously, long-term rates will react to the news a lot quicker than the Fed  -- as in the day of the report. So here is hoping for a modest month of jobs growth and a modest rise in wages. That would be the best of both worlds and is much more likely to help stave off a recession, though there are many other factors contributing to this equation.  On Friday, we will have more information, but not necessarily the answer.