By John Rubino
Three things happened this (Friday) morning: The Labor Department reported a big jump employment; the financial markets responded like kids on Christmas morning; and — with a few hours lag — level-headed analysts deconstructed the jobs report and found it to be mediocre at best.
To take just a few of the high (or low) points:
- Americans are still leaving the labor force
- Most of the new jobs created are part-time
- The vast majority of those are in services, which is to say waiters and bartenders and such
- Most new hires are over 55
Money managers can of course do this analysis and reach the same conclusion, which is that the US labor market remains a mess, with a predominance of old and/or low-paid service drones where well-paid factory workers and bankers used to be. So why did the financial markets pop on this news?
Because mediocre is the now the new perfect. The best-case environment for stocks and bonds is an economy that is growing just enough to stave off a collapse in corporate profits but not fast enough to goad the Fed into tightening. Read More..