A month ago, on news that the unemployment rate had risen by 0.3 percent in August, the stock market rose right along with it. Today, on news that the rate grew by 0.1 percent to 9.8 percent in September, the market fell.
What's up with that?
It appears that traders saw the August numbers as reason to believe the Federal Reserve would keep interest rates at historic lows in an effort to get the market moving. Investors wanted in on the stimulus economy. Also, the total number of jobs lost in August, 216,000, was least amount in a year (and it was revised downward in today's report to 201,000). The report suggested to the market that companies had hit bottom and had matched the size of the work forces with the amount of work available. Productivity was on the rise and forecasts called for a turnaround in global trade.
Today's report features a much grimmer number of total jobs lost, 263,000 against the expectation of 180,000. Traders don't much like surprises, especially negative ones. The figure on jobs lost comes after a set of uncertain reports, from a slowly growing manufacturing sector to last week's jump in news claims for unemployment benefits.
Overall the market seems to be saying that if the recovery has started, it remains fitful.