Today's jobs report is mixed, but there are trends we must consider. I've been touting the "Dirty Fingernails Rally" since October, and we've seen it in earnings and now in jobs. Manufacturing jobs increased by 50,000 last month, which was the biggest leap since 1998. For me that was the best part of the report. Other pluses were 7,000 at auto dealers, although I generally hate car sales people, the average car and truck in this country is 11 years old, so it's a no-brainer. Department stores +19,000 are interesting since department stores were supposed to be dead two decades ago. The tougher parts, and the parts that make me worry about this nation in general, include:

5.5 million Chronically unemployed
23.2% unemployment among 16-19
8.2 million part-time but want full time

Then there's the civilian participation rate, which hit 63.7%, a rate last seen when Ronald Reagan came into office. An astonishing 1.2 million people left the job market, resulting in a very misleading 8.3% unemployment rate. This is amazing and doesn't bode well for the deficit as the nation will have to take these people in as wards of the state. Plus, when people are giving up on America at the record clip we saw last month, it points to problems at the grass roots level. The media is playing it up, and while it was a good number there are other numbers you can't ignore.

Even President Obama tried to play down the number saying they "will go up and down in coming months" but is using the news to push for an extension of the payroll tax cut, telling Congress not to "muck it up." I hate that he's still pushing for the notion we need to remake American capitalism into one "built to last" and that's going to happen through green energy jobs, so we must "double down." The economy could be flying on all cylinders if we dropped that green stuff and stopped the war on business and success. Today's unemployment number would be a low number if we would allow this built-to-last-already economy to really do its thing.

Only One Force Matters ... Jobs
By Carlos Guillen

So far today, stocks are trading nicely higher for the most part, with the Dow Jones Industrial Average up over one percent. What is apparent is that investors have been compelled off of the sidelines by this morning's highly anticipated jobs report with a force analogous to that of a bat hitting a ball.

Investors have, at least for the moment, forgotten about Europe and have ignored that orders to U.S. factories came in less than expected. Yes, according to the European Union, Greece's debt reached 159.1 percent of gross domestic product in the third quarter of 2011, approaching the Unions' full-year forecast of 162.8 percent, all while negotiations to address the debt situation get pushed further out in time. And here at home, factory orders rose 1.1 percent in December, less than the Street's estimate of 1.5 percent and less than the 2.2 percent gain in November. However, this morning's jobs data was certainly unexpected, and certainly well received.

According to the latest data from the Department of Labor, the unemployment rate improved in January to a better than expected level. The unemployment rate in January was 8.3 percent, representing the lowest level since January 2009, lower than the 8.5 percent reported in December and lower than the Street's estimate of 8.5 percent. As it can be observed in the chart below, this rate has dropped for seven straight months. In addition, non-farm payroll employment increased by 243,000, higher than the Street's estimate calling for a 155,000 increase.

Clearly, the headline number's first impression was very encouraging, but there appear to be some major anomalies. The most notable one was that the Civilian Non-institutional Population increased dramatically by 1.69 million, a spike not seen since January 2003. This had the partial effect of increasing the Not in Labor Force level by 1.18 million. There was an update to population estimates, which reflects the results of the 2010 Census. The true effects of the update were an increase of the Civilian Non-institutional Population in December by 1.51 million, the Civilian Labor Force by 258,000, Employment by 216,000, Unemployment by 42,000, and persons not in the labor force by 1.25 million.

Perhaps the most surprising aspect of the report was that the change in nonfarm payroll jobs was much better than expected as it showed an increase of 243,000 jobs while the Street's consensus called for a gain of 155,000. While there have be some fluctuations, the economy has been able to consistently add jobs in each of the last 16 months, and for all of 2011 the economy added 1.82 million jobs (revised up from 1.6M), better than the 1.03 million added in 2010 (revised up from 0.94M). This result also came in well above ADP's nonfarm jobs number posted on Wednesday that showed an increase of 170,000 jobs, which was also better than the Street's estimate calling for a gain of 200,000 jobs. We should also note that the strong nonfarm increment coincides with the favorable trend currently occurring with weekly applications for unemployment benefits (four-week moving average) as they have fallen to levels last seen in more than three years.

All in all, investors are becoming a bit more confident in the direction of employment. It should still be noted that the unemployment rate is still very high, so all is not well, but at least there is some hope.

Getting Technical
By David Urani

There it is, the breakout we've been waiting for. We had a suspicion that if anything was going to break the market stalemate of the past couple of weeks, it would be the employment report. The Dow tested the 12,800 mark and failed to pass it last month, and investors have had no reason to take the market past the psychological point until perhaps now. It is now looking to take out the May high, bringing us to the highest point since mid-2008. This now means we could have the green light to take the next leg upwards.

Even better though is the Nasdaq which deserves a nice round of applause. It has come on strong this week, and today it's breaking the 2007 high. That's right, the Nasdaq is at its highest level since the tech bubble!

But at the same time we have to ask ourselves, where are the investors? The market is a ghost town as volume continues to dry up. It typically dips lower each year during the holidays, but if you discount those days, the 4-week average of volume is now at its lowest since 1999.

ISM Services

Aside from employment, we also got the ISM services index. It hit a reading of 56.8 from 53.0 the previous month, besting the consensus estimate of a slight increase to 53.3. It is at the highest level since last March. New orders and exports saw nice gains, but the really impressive part was Employment, which surged from 49.8 to 57.4, matching its best reading since February 2006.