The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Madeline Schnapp of TrimTabs Investment Research

NEW YORK ( TheStreet) -- Based on our analysis of real-time income tax withholdings, we estimate that the U.S. economy added 171,000 jobs in June, up from 127,000 jobs in May. Employment has increased for nine consecutive months, although job growth in that period averaged only 154,000 jobs per month.

We attribute the acceleration in employment growth in June to lower crude oil prices. Unfortunately, oil prices rose 3% in the past two weeks, which could slow job growth again.

For the economy to gain traction, oil prices need to come down and stay down. If oil prices remain elevated, the economy's apparent improvement in June could be short-lived.

Bottom Line

Crude oil prices dropped 17.5% from the week ended April 29 through the week ended June 24. We think employers stepped up hiring as soon as it became apparent that energy cost pressures would subside. Whether the improvement persists depends on the price of oil.

We expect the economy to continue growing slowly because it faces numerous headwinds:
  • Real wage growth is negative. Adjusting for the 3.6% annualized increase in inflation, wages and salaries rose only 1.5% year-on-year in June. Adjusting further for the payroll tax reduction, wages and salaries fell 2% year-on-year.
  • Unemployment is very high. At its recent pace of expansion, the economy is not creating enough jobs to bring down the unemployment rate much.
  • The housing market is depressed despite low mortgage rates. Since there are an estimated 12 million underwater homeowners, 6.4 million delinquent mortgages, and 24 million unemployed or underemployed workers, housing is unlikely to contribute significantly to economic growth for years.
  • Three of the five Federal Reserve manufacturing districts -- New York, Philadelphia, and Texas -- reported deteriorating manufacturing conditions in June as manufacturers struggled to adjust to high input prices.
  • Vehicle sales, which are an important component of durable goods sales, fell to 11.4 million annualized units in June from 11.8 million annualized units in May. While inventory issues are probably responsible for part of the decline, multiple indicators show consumer confidence is depressed, which is not helpful for sales of big-ticket items like cars.
  • While Europe kicked Greece's debt problems down the road temporarily, Portugal's debt problems are rearing their ugly head again, and they are infecting the credit markets of Spain and Italy.
  • The biggest near-term wild card is the trajectory of long-dated Treasury yields. The first big test comes next week, when the Treasury auctions 3-year notes, 10-year notes, and 30-year bonds without the Fed as the largest buyer. If problems in the Eurozone keep investors fearful, Treasury auctions should be well bid, and yields should stay low. If fear recedes, however, yields may rise and have a negative impact on the stock market.