Stocks fall as jobs report adds to economic fears

Today’s labor report reveals a classic case of addition by subtraction through statistical massage. The positive job creation histogram and down tick in unemployment from 9.8% to 9.5%, viewed as favorable trends for some, arises from workers leaving the civilian labor at a faster than job destruction.

The stock market's reluctant to generate even a short covering rally despite consecutive down days suggests recognition that workers, likely being reclassified as long-term unemployed, are struggling to find jobs today. Statistical tricks used to massage the headline numbers only fool the fools.

Economic activity is either accelerating or decelerating. Economic deceleration can be ignored only so long. The sluggishness of the stock market suggests that legislators, more worried about self-preservation, could be frozen by the fear of losing their jobs in November through association of reckless spending. Playing catch up with fiscal and monetary policy is not only dangerous but also expensive. The long one waits the more stimuli and QE will be required when cries of save me outweigh the drive for self-preservation.

Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average:

Reports on jobs in the past two days had diminished expectations for the snapshot of the labor market. Payroll company ADP said private employment was weaker than expected, while the government said initial claims for unemployment benefits rose unexpectedly last week.

Source: finance.yahoo.com