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Friday, May 03, 2013

Disappointing Employment Report Sends Stocks Soaring

Today's BLS Employment Report showed that the economy is decelerating from a winter boost. The most-watched figure — new jobs created — showed barely more new jobs were created than population growth. And, average hours worked actually declined, which is a sign the economy is slowing down. If the economy were expanding, hours worked would have risen as businesses tend to add hours for existing employees rather than taking on new hires.

The stock market interpreted the disappointing report as a sign the Fed will be upping its QE∞ money firehosing operation. That program pumps money into the markets, sending stock and bond prices higher, but does little to stimulate the economy.