The most important economic data is jobs.  Tomorrow will see the release of the all-important monthly Jobs Report by the Department of Labor.  A survey of economists shows expectations are that 155,000 thousand jobs were created in December.  This morning, the Challenger, Gray headhunting firm said the number of job cuts continues to decease.  After that, ADP, the huge payroll company estimated a whopping 325 thousand jobs were created in the private sector, over twice what economists are expecting.  Then, the BLS announced initial jobless claims dropped about 15 thousand more than expected.  It marked four straight weeks of declines.

While I hope all this data is correct, I’m suspicious.  First, December is historically the hardest month to predict due to the Christmas hiring/firing season.  Second, the ADP doesn’t include government.  Normally, at this point in a recovery, government would be hiring 20-25 thousand a month.  However, in this recovery, that sector has been steadily losing jobs.  Third, most of the new jobs were created by small companies (148 thousand), which is typical of every recovery except this one.  Is this recovery becoming more normal, I hope?

Still, the evidence is clearly that the job market is improving, albeit slowly.

That doesn’t mean the unemployment rate will necessarily decrease tomorrow.  Last month, it decreased from 9.0% to 8.6%, which was hard to accept at face value.  Normally, when the job market starts to improve, many people who had given-up looking for a job will then return to the labor force, which drives up the unemployment rate until they finally get a job.

Not surprisingly, the market likes this data, as Dow futures improved from an 80 point loss at the open to only a 25 point loss.

Sometimes, the trend is your friend!