Stock futures pointed to a positive start after yesterday’s rollercoaster ride. While the cause of yesterday’s 1000 point round trip in the Dow is not known with certainty, it appears to be the result of a combination of several factors including human error, automatic computer generated trades, and panic. In the end, the market ended up down 3.2%. Yesterday’s event will surely be debated for days to come, but it should be viewed more of an anomaly than an indication of capitulation.
Now for today’s matter, the jobs report was unexpectedly strong. The U.S. economy added 290,000 jobs in April, the largest gain since March 2006 and far above the consensus expectations. This also followed an upwardly revised 230,000 increase in March, which was initially reported as a 162,000 increase, and an upwardly revised 39,000 gain in February initially reported as a loss of 14,000. The unemployment rate rose to 9.9% from 9.7%. A rise in the rate at this time may initially sound negative, but it is actually points to optimism on the part of workers, as more Americans are starting to look for jobs.
Not only is hiring improving, but so is the work week. The average workweek for all workers increased to 34.1 hours from 34.0 hours in March. The bottom line is that the U.S. labor market is showing notable improvement.
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