Ah, that dreadful non-farm payroll number rears it's ugly head again. The headline this morning at WSJ is:
The jobless rate fell to an eight-month low of 5.9% in November. But employers added only 57,000 jobs, about two-thirds fewer than economists had expected.
Remember in Newtonian physics where we have to draw vectors to represent force? When it comes to the market, we can apply this sort of visualization as well. In fundamental analysis, this happens over and over. Once good earnings or economic data (remember earnings momentum theory?) have been coming out for a while, and the market has going up for a long time, the public comes to expect things to continue and the analysts will just project and extrapolate the "trend" into the future ad infinitum.
Invariably comes a day where the number will be a "shocker", as if the car was travelling too fast into a "dead man's curve" and it careens over the edge into a ravine. That's exactly what happened today with the jobless numbers. And then they all pretend to be shocked.
I find this to be annoying because they never seem to clue in. Now we have to listen to days or weeks of the "jobless recovery" while the market continues to chop sideways. You know, most countries in the world would love to have a problem such as a 5.9% employment rate. But we are not thankful for such things.
03.12.05 09:54 #