Although stocks were initially under pressure amid ongoing jitters over theEuropean debt crisis, the markets were able to rebound and finish mixed Thursday thanks to a handful of employment reports that pointed to some encouraging news on the jobs front.
“Employment growth is kind of like love; it conquers all,” Cramer said on “Mad Money.” “You get hiring, you get spending. You get hiring, you've got demand. You get new jobs, you get more tax receipts. You create employment, you create wealth, happiness and a bull market that can transcend borders and blot out overseas woes.”
The number of planned layoffs at U.S. firms fell to its lowest level since June, according to the report from consultants Challenger, Gray & Christmas. Meanwhile, private sector employment climbed 325,000 in December, much stronger than expected, according to payrolls processor ADP . Finally, claims for unemployment benefits dropped by 15,000 last week to a seasonally adjusted 372,000, according to the Labor Department.
The three reports come ahead of Friday's all-important December non-farm payrolls report, a key indicator of whether the U.S. economic recovery is still on track. Economists expect a gain of 150,000 public and private sector jobs last month.
The jobs data was enough for stocks to rebound, but that’s not to say Europe’s debt crisis isn’t important or has gone away, Cramer said. It hasn’t. But job growth is incredibly important because, 1) When people get hired, they become more confident, 2) A more confident consumer means more spending on goods and services, which will benefit sectors across the board, 3) Small businesses are more likely to be created in a healthy job environment.
“Growth means a system that's been left for dead, our banking system, gets revived because the sheer number of bad loans finally begins to shrink,” Cramer continued. “Capital gets built. The result? Our banks become healthier. Maybe even healthy enough to withstand or at least offset the weakness of the European banks and the potentially defaulting sovereign debt issuers.”
Before the market had job growth to turn to, it had nothing to counterweight Europe’s debt woes. So even as Europe’s problems are still significant, Cramer said they are less significant to the market because domestic banks have so much capital. And that’s a good thing.
—CNBC.com and Reuters contributed to this report
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