Keystone's Morning Wake-Up 10/3/14; Monthly Jobs Report

The Monthly Jobs Report is minutes away at 8:30 AM EST. The consensus is for 215K jobs recovering from the 142K jobs last month. The revision to last month's number is important. The unemployment rate is expected to remain steady at 6.1%. Average hourly wages are expected to remain flatish at +0.2%. Wages remain key since the inflation that the Fed and other central bankers are trying to create cannot exist unless wages are increasing.

At 8:30 AM, US futures remain strong. S&P +10. Dow +76. Nadaq +18. The Monthly Jobs Report is 248K jobs with an unemployment rate of 5.9%. The revision to last month’s (August) paltry 142K jobs is 180K and July is revised from 212K up to 243K. The 248K jobs are a strong recovery from the low number last month and places jobs back above the 200K threshold. Both revisions are higher adding to the joy. The 5.9% unemployment rate, a five handle, is the lowest since July 2008. The job gains are broad-based across the sectors verifying the same trend in the ADP Employment Report two days ago. The average hours worked is 34.6 up a tiny 0.1 from last month and wages are unchanged verifying that inflation in the economy is not in play.

S&P futures react wildly selling off a few handles but then immediately recovering and rocketing higher as traders view good news as good news. S&P +14. Dow +105. Nasdaq +29. The 10-year yield jumps to 2.47%. Gold collapses 13 bucks to 1201 threatening to fall through 1200 level. The US dollar is up to 86.405 and the dollar/yen explodes higher to 109.50. Banzai! A happy tone is set for the last day of trading.

Interestingly, the jobs report is the last available before the 11/4/14 mid-term elections so conveniently (for the Democratic Party) voters will be optimistic as they head to the polls in 31 days. The next jobs report is 11/7/14. President Obama would not have been out boasting about the economy yesterday if a poor jobs number was on tap. And more interestingly, if the economy is all wine and roses and everyone is boasting about 200K jobs again (a normal recovery should actually be printing between 300K and 400K jobs and higher each month) why does the Fed maintain the ZIRP Forever policy?