Can’t We Just Enjoy the Moment?

Dare I ask it? No, I can’t. Okay, I can’t help myself – Could it be the market might return to a sense of normalcy based on the jobs report that came out today?

Could it be that the market will see the absolutely fantastic jobs report that came out today as some kind of a sign that the US economy is still moving forward despite the problems in Europe, China, Japan, Ukraine, the Middle East, Africa, and Timbuktu, for that matter?

The January jobs report isn’t just a single piece of good news. It marks a sea change in the labor market in which the middle class and working class are finally starting to get ahead.

Some 257,000 jobs were created in December, which continues that record-breaking string of number of months of 200,000-plus jobs created. Chock full of good news, that report it was, so let’s take a look at the highlights, starting with the perspective of Michael Feroli, the chief U.S. economist of JPMorgan Chase.

Cyclical forces are beginning to tilt the growth in purchasing power toward the lower end of the income distribution. This is in contrast to earlier in the cycle, when many of those same forces were tilting the skew in consumer spending toward the upper end of the income distribution.

Translated, the above means wage growth is happening for lower level, middle-class workers.

The two lowest-paid industries–retail and leisure & hospitality–have also been the two industries showing the fastest wage growth over the past year, up 3.0% and 3.4%, respectively.

Geez! Couple that with the drop in the price of gas, and you have a fair amount of cash going back into the economy. Oh, but there is more.

It wasn’t just the 257,000 jobs added in the month, which was a bit above expectations. It was the upward revision to previous months: 329,000 jobs in December and a block buster 423,000 in November.

Holy Cow! Did I write that right? November was revised up to 429,000! We have not seen numbers like that since, well, since, Mr. Bill Clinton, and we all know what his presidency did for the US economy – revived and powerfully moved it into the 21^st century via the Internet.

Okay, back to the present … Not only did the two lowest paying industries see a huge wage increase, but the overall increase was decent as well.

It was also the gain in average hourly earnings, up half a percent after a small decline in December. That made for a one-year increase of 2.2 percent, which is good considering that consumer prices rose just 0.8 percent in the year through December.

Again, how about that gas price drop thing and what a boon it is and will be to US consumer spending? Wait! There is still more jobs stuff to wow you.

The best news of all may have been the increase in the labor force. A tad more than 1 million entered the labor force, meaning they were either working or looking for work. The flood of people into the labor force pushed the unemployment rate up a bit, to 5.7 percent from 5.6 percent. But that’s not a bad thing. For this economic expansion to continue, more and more people who have been on the sidelines are going to need to reenter the labor market.

And there you have it. “For this economic expansion to continue …” Yup! The economic momentum is moving forward, so we should expect the market to react normally to that, right? Hold on Baba Looey. Not so fast.