The stock market will likely be able to shrug off today’s unemployment data, despite the fact that it was horrible. This is because for the most part, the jobs data showed the less competitive or past-bubble parts of the American economy being hollowed out- manufacturing, construction, and retail.
To some extent, this adjustment has to happen. Though of course the transition should be managed with an eye towards reducing the suffering for those who lose their jobs.
This report doesn’t say anything bad about the long-term prospects for the U.S. economy. It just shows that America’s necessary economic adjustments might be a bit more painful in the near-term than some might have expected. There’s a lot of past labour mis-allocation (property, retail, low-value manufacturing) to be adjusted, and the process clearly isn’t over. Yet the stock market can likely accept this and move on.