Forex Signals

Market prognosticators are making few definitive calls before the November congressional elections, but August’s mixed jobs data got a thorough going-over as forecasters looked for signs of hope.

With the unemployment rate rising to 9.6% on a net loss of 54,000 non-farm jobs, the report did not exactly signal an economic revival.

Still, the news wasn’t all bad. Although jobs were lost in August, the net decline was less than half the expected figure, and that was enough to jolt stocks again, after the Dow Jones Industrial Average suffered its worst August on a percentage basis since 2001.

The Dow closed up 128 points on Friday, up 2.9% for the week. The S&P 500 climbed 14 points, up 3.8% for the week.

Traders appeared to look past the headline numbers of the Labor Department report and instead cheer the details. The private sector added 67,000 jobs last month, a sign that progress may persist, according to PNC chief economist Stuart Hoffman.

In a Friday note, Hoffman said the jobs report reveals “the highly nuanced nature of economic data,” which allowed for a loss of mostly census-related government jobs but still remained “supportive of an ongoing, but ‘half-speed’ (or less), recovery.”

Heather Boushey, senior economist at the Center for American Progress, said Friday that “the labor market has entered a holding pattern.” The private sector’s monthly average gains of 78,000 in June through August are “not nearly enough to begin to reduce unemployment.”

David Rosenberg, perennially bearish chief economist and strategist for Gluskin Sheff, didn’t deviate from his view that the U.S. is in a continuing, long-term Japanese-style depression, but he conceded that the jobs report didn’t necessarily herald a break in the recovery.

“Dodging a bullet, yes; out of the woods, no,” he wrote Friday, adding that report “was hardly strong, but admittedly, is not consistent with the economy contracting this quarter.”