The January jobs report-hiring surged, while unemployment fell-sent a spike through the markets on Friday, but CNN's Erin Burnett says there's a catch. "This is a really good jobs report," Burnett told CNN's Wolf Blitzer. "It's been five months in a row that we've seen the unemployment rate drop. That is very, very significant." But for a full economic recovery, expect the unemployment rate to rise. "At some point before it recovers, it actually needs to go up again."
As Burnett explains, the jobs report only includes Americans who have been actively searching for a job in the last month-but there are many more who've quit looking out of frustration. "There's several million people who are truly disenfranchised," says Burnett. As the labor market improves, those people will start looking again-and that will cause the unemployment numbers to pop up. "Even though it's going down now, at some point...it actually needs to go up."
The unexpectedly strong jobs report was nonetheless welcome news on Wall Street, as CNNMoney reports:
The rally pushed pushed the Dow, up more than 5% in 2012, to its highest level since May 2008. The Nasdaq, up more than 11% for the year, climbed to its highest level since December 2000. The S&P 500 has gained almost 7% this year, and finished at a six-month high.
Economists had expected a slowdown in post-holiday hiring, considering that about 40,000 temporary couriers were hired for the holidays alone..
"The jobs data blew away market expectations," noted Marc Chandler, global head of currency strategy at Brown Brothers Harriman, calling it a "monster" jobs report. "This coupled with other recent reports for January, show the year has begun off on a firm note," he added.
CNN