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When Good News = Good News

Stocks at their highest level in 6 trading sessions....what's up?

It's simple: the economic data continues to improve. Initial jobless claims continue to decline. The surge in productivity and related drop in unit labor costs suggests earnings continue to improve.

The Q3 productivity gain—9.5 percent compared Q2—was due to positive output and a drop in hours worked.

Here's the bad news: improved productivity of this magnitude is typically associated with more hiring, but that doesn't appear to be happening. Gains of 9.5 percent in Q3 and 6.9 percent in Q2 have not been associated with more hiring. Not clear how much more output we will need to see to get firms to start hiring.

One thing's for sure: American corporations are getting more work out of their employees.

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