Why the unemployment number are Bullish...

FRED:UNRATE   Civilian Unemployment Rate
unemployment numbers were released earlier today they missed substantially from estimates of 978,000 jobs came in at 266,000 the big number here which surprised me is that manufacturing jobs dropped by 18,000 so that traction that we’ve seen over the past several months is one away completely.

Let me address why I think the markets are doing better today. I believe there was a great fear that we are overheating in the economy and this shows that this is not happening one of the other things I want to mention here which is important is that my expectations that I discussed on the Livestream on YouTube on Wednesday were that we would have at least one or two more months of good employment numbers and then it would flatten off and the Fed would struggle to get things to move forward.

So this is going to put a lot of pressure on states and federal government to get the country open and moving forward. This sets the tone for the possibility of more stimulus in a classic scenario of bad news is good news.

Looking at the long-term employment chart this is important also to look at as the average between the high and low going back to 1949 is 6% so we are at 6.1 everybody was expecting this to drop down to 5.8 today so we are actually in the mean of were employment normally exist over time. So we tend to get a few points below 6% in a few points above and those periods of time are considered to be booms or recessionary periods depending on how much above or below these lines we are at.

My expectations are now that we did get this bad report is the report for May when it comes out next month this is going to be important to keep a close watch on as if it does not down tech below 5.8 then this is likely to become a big issue with the Fed trying to stimulate the economy. I think will begin to see and hear more rhetoric from the treasury/Janet Yellen over the next several weeks if they are seeing numbers in the background that we can’t see that are concerning them.

In summary, this is why I believe the markets are doing better today and will continue to do better as folks will be expecting to see some noise starting around possible new stimulus and other things that are likely to help push the new infrastructure bill through.