This is Tracey Ryniec filling in for Steve Reitmeister
Friday's dismal jobs report shocked investors. For the second month in a row, job creation wasn't even close to where it's supposed to be at this, or any, stage of the recovery cycle. It's almost hard to believe that it's been nearly 3 years since this crisis first began and jobs are still stuck in the neutral zone. Why isn't there more job creation?
It all comes back to the very thing that started the financial crisis: housing. New home construction creates jobs. Right now, we're still near record lows for new construction starts. Until we get more new home construction, we won't see the big job growth we need to spark the economy.
With the jobs report behind us, all eyes are now turning to corporate earnings. Earnings season officially begins today with Alcoa reporting after the bell. US companies have been producing amazing earnings over the last few quarters, especially if they have overseas operations. Many of the old main line manufacturers, those that have been in business since, say 1920 or 1930, reported some of the best quarters in their history in the first quarter. Will they do it again?
The economy is a conundrum. We have an employment market that is on life support but many companies are in the best financial shape of their lives. They are lean, mean, fighting machines. Starting this week, we're going to see just what kind of condition the global economy is in. I'm betting that it is stronger than Friday's dismal jobs report indicated. If so, market bulls could push stocks to new 2011 highs.
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