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Confusing Numbers

February 1, 2013 – 6:11 pm

jobsThis morning’s jobs report was both a disappointment and a reason to be somewhat cheerful but maybe it was just confusing. The expectation was that 170,000 new jobs were created in January but the increase was only 157,000. It is good that at least we had more jobs produced rather than a fall in the number. However, the confusing part was that for all of 2012 the government revised the jobs number by raising it by 33%. So the month to month reports that are revised a month after they were reported were again revised at the end of the year by 33%? If we believe that then why did we see an increase of the unemployment rate from 7.8% to 7.9%? How can you add several hundred thousand jobs for the year and yet have an unemployment rate increase? I realize that the calculations are taken from different surveys but it just does not pass the smell test.

The stock market liked the numbers which just shows you how strong the current rally is and has been since the beginning of the year. It is never wise to argue with the stock market. It is telling us the economy is going to get stronger and that is probably the case but that does not mean the numbers we see coming from Washington are very accurate.

Good Trading
Steve Peasley

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