You want a good jobs report...No Problem

Jobs Report: 'Numbers Are Almost Too Good to Be True'
Published: Friday, 4 Dec 2009 | 9:45 AM ET Text Size By: Reuters
US employers cut far fewer jobs than expected last month in the best showing for the labor market since the recession began, boosting the U.S. dollar and global stock prices on hopes for a strong economic recovery.


The economy shed only 11,000 jobs in November, well below the 130,000 loss financial markets had braced for, while the unemployment rate unexpectedly dropped to 10 percent from October's 10.2 percent, a government report on Friday showed.

The labor market improvement was broad based and 159,000 fewer jobs were lost in September and October than previously thought, according to the Labor Department data.

"These numbers are almost too good to be true," said Tom Sowanick, chief investment officer at the OmniVest Group in Princeton, New Jersey.

US stocks opened sharply higher and global stocks erased losses, while prices for US Treasury debt fell and the US dollar firmed as traders speculated the data could lead the Federal Reserve to raise interest rates sooner than had been thought.

"We're almost back to normal," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mistubishi UFJ in New York. "The economy is lifting at a much greater rate than expected."

Analysts had expected the unemployment rate to hold steady at a 26-1/2 year high of 10.2 percent.

Soaring unemployment had become a political headache for President Barack Obama and his fellow Democrats, who are worried they will loose seats in Congress next November without a faster recovery.

On Thursday, Obama had appealed to the corporate sector to join in the administration's employment-creation efforts.

While the economy has resumed growth after four straight quarters of decline, economists have been concerned labor market weakness would prevent the recovery from becoming self-sustaining.

"The data point to a transition in the economy from a deep recession to a modest recovery," said William Sullivan, chief economist at JVB Financial Group in Boca Raton, Florida.

"This will encourage the Fed to be more vocal about an exit strategy from their highly accommodative posture," he said.

The Fed cut benchmark interest rates close to zero last December and has pumped more than $1 trillion into the economy to try to spur recovery from the worst recession in 70 years.

Since December 2007, when the recession began, 7.2 million jobs have been lost, the Labor Department said.


But the pace of layoffs has slowed sharply from early this year.

The report suggested the bruised job market may be close to turning the corner, with jobs growth likely early next year, although some analysts remained skeptical.

The economy has shed jobs for 23 straight months and the November data was was the strongest since December 2007, when nonfarm payrolls increased by 120,000.

Four sectors, including the government, added jobs last month. Manufacturing payrolls fell 41,000 after dropping 51,000 in October. The construction sector shed 27,000 jobs, a sharp slowdown from the average 63,000 decline seen in the prior six months, while the service-providing sector added 58,000 workers.

Professional and business services added 86,000 jobs, while education and health services increased payrolls by 40,000.

Temporary help employment rose by 52,400, building on other recent gains.

The average workweek, which closely correlates with overall output and gives clues on when firms will start hiring, rose to 33.2 hours from 33 hours in October. That was the highest since February. Average hourly earnings inched up to $18.74 from $18.73.
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No one will believe this story including me.

Notes:

Gold 1188 - 30
The Dollar index has reversed a breakdown and is 75.37 + .70
Oil is 77.47 +1.01
The market is 10457 +89

I have short term sell signals on Gold and the Euro

Stock market is still has not broken

Still not adding on will wait until dust settles. I want to see how they respond to the sell off in Gold before I add.

Their risk trade story of weak dollar strong stocks is upside down today. The dollar is up strong and so is the market. I think before its all over both the market and Gold will get nailed and the dollar will take off.

This report aside my beliefs remain the same. I read a report from China that is complaining about how the weak dollar is killing the world economic recovery. The key there is that the World recovery is weakening. I suspect that the dollar will rally for that reason and not because our economy is so strong. That is why I like the EDZ (3X emerging markets short)

Still waiting to add to Gold shorts as I need further weakness and I want to see the reaction to the sell off. I would like to see 1120 go.

I think this is going to confuse alot of traders. I would suspect that they are moving to the sidelines. Should the dollar rollover again they will be back on Gold again. This decline needs to be a little stronger before I will say that it is over now.

The sell signal on the market is still 10200 to me and 1120 on Gold
No trades today, Gols closed at 1170 -46 and the Dollar index at 75.87 +1.20. I think this is similar to the Dubai hit and they will off this sell off next week.

Mikey

I am still waiting for the