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Jobs, Jobs, Jobs

December 4, 2009 – 11:24 pm

This morning the market reacted to the quasi good news about November jobs. Why it is quasi good news is because we still lost jobs last month, we just lost much fewer than expected, 11,000. The expectation was for a loss of 100,000 and October’s job losses were revised downward from a loss of 219,000 to 139,000. The unemployment rate fell to 10% from 10.2%.

All good news, sort of. Most agree that the jobless rate is higher than the official report indicates because of the way our government counts the unemployed. Some have speculated that the unemployment rate is as high as 14%. That is certainly bad news for those who are unemployed but for investors it is not the actual numbers that matter. What matters is the change in direction and not just in employment numbers but in all the statistics.

Also, it matters to the market what the ‘leading economic indicators’ are saying not the lagging indicators, and the jobs report is a lagging indicator. Why do you think the market has rallied since March? That was six months ago. This proves that the market always looks forward and is usually correct. The market has been saying that we are going to recover from this economic malaise and we are.

What the market can not tell you is how strong the recovery might be.

Good Trading
Steve Peasley

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