Were the Week’s Big Gains a Snow Job?

The S&P 500 posted an almost 3 percent gain this week, bolstered by improvement in the employment situation. Stocks moved sharply higher today after the latest jobs report showed that the labor market shed just 36,000 jobs in February. Manufacturing jobs actually increased by 1,000, far better than the 15,000 jobs economists had expected the economy to shed. Consensus had pegged overall job losses at 68,000. Despite this improvement, the unemployment rate remained unchanged at 9.7 percent.

But some economists question the validity of the jobs report, wondering if the severe snows that hammered the Northeast might have skewed the numbers; many state employment offices were closed due to inclement weather.

Average hourly earnings also grew modestly, up 0.1 percent from the prior month and 1.9 percent from a year ago, fostering hope that personal incomes will increase in February after a 0.1 percent gain in January.

Hours worked fell slightly, down to 33.8 from 33.9, largely due to productivity enhancement. The Bureau of Labor Statistics reported that nonfarm productivity rose 6.9 percent in the fourth quarter of last year, reducing labor costs by 5.9 percent.

The weekly jobs number ostensibly reinforced this improvement; initial claims declined from 498,000 to 469,000, while continuing claims declined from an upwardly revised 6.634 million to 4.5 million.

Real estate news wasn’t nearly as positive this week. The National Association of Realtors reported that pending home sales nosedived 7.6 percent on a month-over-month basis in January. The trade group blames the severe winter weather that gripped much of the nation that month. Others point to the dip in sales as a sign that the real estate recovery remains on shaky ground and suggest that it the high unemployment rate and stricter lending standards are making it difficult to attract buyers. Nevertheless, January sales were up 8.8 percent from a year ago.

A 0.6 percent decline in construction spending is also widely attributed to adverse weather conditions.

Race to the Summit

How best to ride this market? Join me and my colleagues GS Early, Elliott Gue, Yiannis Mostrous, and Roger Conrad at the historic Hotel del Coronado for the 2010 Wealth Society Member Summit.

You’ll have the extraordinary opportunity to meet one-on-one with me, Elliott Gue, Yiannis Mostrous, Roger Conrad and GS Early and ask anything you want about how to keep and grow your nest egg.

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Space and time limit us to 100 participants, so mark the date on your calendar: April 23-24, 2010, in San Diego, where they say it’s 72 and sunny every day of the year. You may find all details at www.InvestingSummit.com. Better yet, call 1-800-832-2330 (between 9:00 a.m. and 5:00 p.m. EST Monday through Friday) or go online now to reserve your seat at the table.