Unemployment Sends Mixed Signals

government spendingAfter a worse than expected ADP job loss report that came out Wednesday (we lost jobs instead of an expected growth in initial claims), investors were quite anxious to see what Friday's number showed. The results are mixed. Jobs increased 162,000, which was short of the expected 200,000 number analysts were expecting, however, there were other details that made investors a bit more confident.

Going into Friday, over half of the expected job growth was anticipated to be from the recent temporary census jobs being offered by the government. It is hard to take these jobs into account, because they are short term and many of these people will be back on the job hunt in a few months. Friday's number showed that only 48,000 jobs of the 162,000 were from census hiring. As a result, investors cheered the higher than expected private sector job growth that occurred last month. On the other hand, many are stating that last months "improved" hiring had a lot to do with the vicious weather of February. At any rate, any remote sign of job growth will obviously cause optimism, considering that optimism has existed in the market for over a year now with absolutely zero job growth!

Due to the holiday, markets were closed for cash trading on Friday, however, futures were opened half day and traded mostly up. The big question on everyone's mind and what will ultimately be the deciding factor is if this current growth is sustainable. There is no doubt that much of the recent growth we have seen have been a result of government spending and incentive programs. The government has done a very good job of "numbing" the pain of a massive recession/depression. However, at what consequences do we enjoy this numbing. In past times, other countries have had devastating affects from ruthless spending during contracting times. Hopefully, we can escape this without just delaying these problems for the next generation. Only time will tell. Happy Trading.

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