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Jobs 'Shocker' Not So Shocking

The November jobs report blew a giant hole in the employment forecast of just about every Wall Street economist, but it may not indicate an end to improving economic news.

Unemployment line
Unemployment line

Growth of 50,000 new private-sector jobs was about 100,000 below what many economists expected. Total nonfarm payrolls of 39,000 was way below consensus of 149,000. The unemployment rate was expected to hold steady at 9.6 percent and instead it rose to 9.8 percent.

"It's the ISMs that are important," said Kevin Ferry of Cronus Futures Management.

"The cluster of good economic news we've seen, this number is not going to knock that out."

Nonmanufacturing ISM came in at 55 in November, its best level since May, and up from October's 54.3. The new orders index was 57.5, its best level since April. Manufacturing ISM earlier this week was at 56.6, a slight decrease from 56.9 in October.

Ferry says employment is lagging and for that reason, he expects the unemployment rate to keep rising as the economy improves and discouraged people start to look for work. "The confidence is going to close the gap between the reported (unemployed) and the actual. As they get encouraged, they include themselves as looking for work," he said.

Meanwhile, futures took a dive, after two days of exuberant stock market gains. But there's already bullish spin that the Fed quantitative easing program will save the rally and stocks opened just slightly lower.

Scott Redler of T3Live.com said in a note that he doesn't see this as "game over" for bulls, but it will keep them honest.

He said levels he's looking for on the S&P 500 are support at 1213-1215, then 1206-1207 and 1198-1201.

Moving on from jobs, focus shifts to the tax negotiations and whether market expectations for a full extension of Bush tax cuts will be met.

Questions? Comments? Email us at marketinsider@cnbc.com

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