Friday, April 1, 2011

Perception Trumps Reality: Stocks Buoyed by Jobs Data

Like it or not, most of the people who watch these kinds of numbers generally accept what the BLS calls "data" as being somewhere close to the truth. Regardless of opinions on the birth-death metric, various seasonal adjustments and the entire methodology which leaves out discouraged workers, March non-farm payroll provided a boost to markets prior to the bell, posting a monthly jobs gain of 216,000.

Broken down, the private sector showed a gain of 230,000 jobs, while the public sector - government - shed 14,000 in March. That ticked the unemployment rate down to 8.8% and marked the first time in five years that private employers added more than 200,000 net new jobs.

In the widest general terms possible, it was rousing good news for the US economy and the stock market, whether the robust numbers are true or not. Stocks galloped out of the gate, gave much of their gains back in the afternoon and finished on an uptick.

Dow 12,376.72, +56.99 (0.46%)
NASDAQ 2,789.60, +8.53 (0.31%)
S&P 500 1,332.41, +6.58 (0.50%)
NYSE Composite 8,469.34, +64.36 (0.77%)

Advancing issues led decliners by a solid margin, 4204-2339. NASDAQ showed 249 new highs and 29 new lows. The same spread was in effect on the NYSE, with 382 new highs and 12 new lows, even more an extreme spread than yesterday's already overbought situation. Volume was slightly better than the low, low numbers posted all week.

NASDAQ Volume 2,057,080,375
NYSE Volume 4,220,516,000

The bad news of the day came from the commodity space, where crude oil hit another 2 1/2 year high, closing at $107.94, up $1.22 on the day. With equities soaring and the outlook for extending the Fed's QE program past June dying on the vine, precious metals took an untimely hit, with gold dropping $11.00, to $1,428.90, and silver falling in tandem, down 16 cents, at $37.73.

As the second quarter starts out on a positive note, investors appear pleased with recent gains, unemployment actually appears to be on the wane and the governors of Federal Reserve are taking bows and praise for how they've handled the as-yet-unresolved financial crisis.

With the caveat that the financial media might be spinning everything a bit more positively than most would dare, America seems not ready to fall into the ocean of debt below it, nor does the congress have gained much in the way of fiscal restraint, though signs of progress have been noted, especially in the House of Representatives.

There's still enormous problems which have yet to be sorted out, but only the robustness of the American economy can be credited with having withstood shocks equally from the financial, natural and political spheres.

While this space has been generally devoted to the darker sides of the economic debate for quite some time, Mr. and Mrs. Average American don't read Fed minutes, track commodity prices or even understand what a credit default swap is. Rather, the bulwark of American enterprise wants only to go to work, receive a fair pay rate and raise their families.

It is a fact that Americans still maintain the highest standard of living on the planet and despite its detractors, maintains a safe, livable environment for even the poorest of its citizens. The world revolves around the US dollar, love it, hate it or loathe it, and it probably will for some time. There are many problems still needing correction, but for today at least, the dark clouds of the past few years seem to be parting and the sunshine of economic freedom is shining through.

Maybe the words of Peter Benenson, the English lawyer and founder of Amnesty International, are appropriate for today: "It is better to light a candle than curse the darkness."

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