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As the monthly employment report showed 162,000 jobs were created and the unemployment rate held steady at 9.7%, investors can now look past periods of job loss toward one of growth. With the data released on Good Friday when the U.S. stock markets were closed, any reaction to the news will be postponed until this week. However, we can begin to ponder what the improving employment picture means for stock prices.

For nearly two years in my weekly newsletter EPIC Insights, I have been producing a table that compares the current period of job loss to those in the past. What had once been an interesting way to analyze the current environment, has become exhausting. Prior to the Great Recession, the longest period of sustained job loss was 17 months, the highest tally of jobs lost was 2.5 million, and the highest percentage of the population to have lost jobs was 1.5%. Each of these numbers was surpassed long ago.

As March turns to growth, we can finally begin looking past further declines and toward recovery. This is a moment I have been waiting for, and I welcome the change. The question is how robust the recovery will be and how much of it has been anticipated by the stock market. On both of these fronts, I am nervous. In the last 60 years, we have not sustained anywhere near this level of job loss. Acknowledging the difficulty of anticipating how jobs will be created in the future, we have lost a series of positions that will never be replaced. Therefore, growth will occur in the future, but the path to reclaim the 8.4 million jobs lost will be sporadic and uneven.

As for the stock market, previous periods of job loss have seen the S&P 500 increase roughly 10% between the end of jobs being lost and the amount of time it took to replace those lost jobs. In the pre-1990 recessions, it typically took less than one year to replace those jobs that were lost. The last two recessions took an average of twice the recession's length to replace those jobs. Assuming the recent past is the proper model to follow, it would be upwards of five years before we fully recover. Receiving a 10% return during a one-year recovery period is reasonable, but those who need five years to achieve the same return will be disappointed. Therefore, as we watch Friday's announcement, perspective is needed. Ideally the economy will once again start growing. However, that alone does not determine if stocks will remain in rally mode.

Source: Employment Growth Ahead?