October jobs double prediction, stock market drops

Huh? A strong economy causes the stock market to take another tumble? From the Associated Press:

WASHINGTON (AP) — Employers boosted payrolls by a surprisingly strong 166,000 in October, the most in five months, an encouraging sign that the nation’s employment climate is holding up relatively well against the strains of a housing collapse and credit crunch.
 
The Labor Department’s report, released Friday, also showed that the unemployment rate held steady at 4.7 percent for the second month in a row. It’s a figure that is considered low by historical standards.

Job gains were logged for professional and business services, education and health care, leisure and hospitality, and for the government. Those employment increases more than offset jobs losses in manufacturing, construction and retail — casualties of the problems plaguing the housing market.

The latest report on employment conditions around the country was better than economists were anticipating. Economists were forecasting payrolls to grow in October by about half the pace seen — around 80,000. They did correctly predict the unemployment rate would be unchanged.

“Businesses have not clammed up on the hiring scene as some feared,” said Ken Mayland, president of ClearView Economics. “The wheels aren’t coming off the economy.”

On Wall Street, stocks traded mixed in the early going as investors found something to like in the surprisingly strong jobs report but remained jittery about the overall health of the economy. The Dow Jones industrial average fell 65.85, or 0.49 percent, to 13,502.02 in morning trading, pulling back after rising in the opening minutes.

In other economic news, orders placed to U.S. factories edged up 0.2 percent in September, an improvement compared with the 3.5 percent drop registered in August, the Commerce Department said in a second report. The manufacturing news was better than the 0.4 percent decline analysts were expecting.

Job growth doubled analysts’ estimates, unemployment historically low, factor orders up 0.6% over analysts’s estimates. Yet investors remain jittery about the overall health of the economy. For the second month in a row, America set the all-time records for months of uninterrupted growth of payroll employment.

Yes, oil prices are high and I’m disturbed about the devaluation of the dollar. However, it’s obvious that neither of those two factors are affecting the economy.

Can somebody please ‘splain this to me?