Even though buy on the rumor and sell on the news is standard, I think the market is once again under-rating the good news in the February employment report. The headline employment growth number of plus 192,000 was not bad, especially when you add in the additions of 58, 000 from December and January. However, the household employment increase of 250,000 jobs was very good, especially after the fantastic increase of 589,000 in January. Household employment expansion has produced a decline in the unemployment rate of 0.9 percentage points in three months, much better than most everyone expected.
We’ve all gotten so used to bad news that we seem afraid to acknowledge good news lest we appear naïve. Let’s just admit it, the February employment/unemployment report was good news.