At 8:30 AM this morning, Dow futures indicated the stock market would open flat. Within minutes, it indicated the market would gain 100 points as soon as it opened. What happened?
Of the 130 economic reports issued each month, the stock market pays the most attention to the monthly Jobs Report. Judging from the sudden jump in futures, you know the report must have been better-than-expected.
The market was expecting that only about 135 thousand new jobs were created last month. Instead, it was 165 thousand, and the unemployment rate dropped from 7.6% to 7.5%. More significantly, we learned that the Jobs Reports for February and March were under-stated by another 114 thousand jobs. Jobs created in February were revised from 268 thousand up to 332 thousand, which is the best in years. Despite severe fiscal headwinds from the Sequester and increased taxes, the job market looks better than we previously thought.
But, it is not great! We need to average at least 250 thousand a month to make a meaningful dent in the unemployment problem. The number of both unemployed and under-employed workers is still well over 13 million. Every single day they are not employed fully creates a permanent loss of income for the country.
Remembering that our Federal Reserve is the only central bank in the world that has a combined mission of controlling inflation AND unemployment, the slowly improving job market with minimal inflation means the Fed is accomplishing its mission in the short-run . . . even if it is not the right thing in the long-run.
Of the 130 economic reports issued each month, the stock market pays the most attention to the monthly Jobs Report. Judging from the sudden jump in futures, you know the report must have been better-than-expected.
The market was expecting that only about 135 thousand new jobs were created last month. Instead, it was 165 thousand, and the unemployment rate dropped from 7.6% to 7.5%. More significantly, we learned that the Jobs Reports for February and March were under-stated by another 114 thousand jobs. Jobs created in February were revised from 268 thousand up to 332 thousand, which is the best in years. Despite severe fiscal headwinds from the Sequester and increased taxes, the job market looks better than we previously thought.
But, it is not great! We need to average at least 250 thousand a month to make a meaningful dent in the unemployment problem. The number of both unemployed and under-employed workers is still well over 13 million. Every single day they are not employed fully creates a permanent loss of income for the country.
Remembering that our Federal Reserve is the only central bank in the world that has a combined mission of controlling inflation AND unemployment, the slowly improving job market with minimal inflation means the Fed is accomplishing its mission in the short-run . . . even if it is not the right thing in the long-run.
