Sunday, April 3, 2011

Stock Market: A New Tailwind From the US Job Market

The Stock Market started the new month with new gains. Investors cheered the monthly US employment report, which was better than expected. Non-farm payrolls grew 216,000 in March, the fastest pace since last May. The jobless rate dropped to 8,8% (from 8,9%).

The revitalization of the job market shows that the CEOs are now reacting to rising company profits. They hire more people because they want to expand their businesses to benefit from the economic upswing.

This confirms that the recovery of the economy is sustainable and therefore the rally on the stock market most likeli will continue. People who get new jobs will consume more and create more profits for the companies. Rising company profits in turn generate more gains on the stock market.

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