Yesterday morning, the US Department of Labor released the monthly unemployment statistics. The figures were anemic, with an overall loss of 95,000 jobs and the official unemployment rate holding steady at 9.6%. The stock market rejoiced, with the Dow Jones Industrials closing above 11,000.
On the surface, it seems strange: the employment figures don’t seem to suggest a recovery in progress. Maybe investors actually want to see high unemployment, but the figures aren’t bad enough to suggest that either.
But the reason the stock market went up seems to have very little to do with the unemployment rate itself: the thought is that the Federal Reserve will make more money available to stimulate the economy.
So we’re all excited because of the new flow of funny money, so that investors can play their silly games. If the money went for something productive, I might feel differently about it, but it seems to accomplish exactly nothing. Yes, investors will be happy and the stock market will go up, but don’t expect it to resolve into anything so mundane as actual jobs for Americans.