A stronger-than-expected jobs report could mean an optimistic stock market next week with further market gains likely.
The economy may not be headed for another severe downturn as feared after a positive government’s nonfarm payrolls report on Friday.
All three major US stock indexes increased more than one percent on Friday.
September is usually the weakest month for the market but the Standard & Poor’s 500 Index .SPX began on a strong note, gaining 3.8 percent for the week, it’s best in eight
In contrast, for the month of August, the S&P 500 fell 4.7 percent.
“The data forces a re-evaluation of the underlying thesis of the economy” said Charles Lieberman, chief investment officer of Advisors Capital Management LLC, “and how the stock market is priced”.
“The employment report is really the keystone. If the economy is producing jobs, the thesis of a decline in the economy goes out the window,” he added.
The most difficult hurdles as the economy attempts to recover from the worst downturn since the 1930s has been high unemployment and weak consumer spending.
The catalyst for a bullish end to the week was Friday’s jobs report because although overall payrolls shed jobs for the month of August, the decline was much lower than expected.
This news gave a ray of hope for the recovery according to analysts.
Other positive data this week showed an unexpected rise in the Institute for Supply Management index on U.S. manufacturing, stronger-than-expected homes pending sales in July and a second week in a row of lower initial jobless benefits claims.
