Many thought the unemplyment rate to worsen or at best stay, hold its level. However, labor statistics illustrate employers eliminated fewer jobs this month than last month. The news is well received especially considering this is a time when staff is trimmed to adjust expenses to meet company year-end financial projections.

However, the financially literate translation is that investors are responding by displaying a greater confidence in Corporate America by placing more money in the stock market. This infusion of money allows companies to raise (undebted) money to promote growth which means…more jobs. Again, the number looks small considering the unemployment rate has more than double since 2007, but it’s one more positive sign that the economy is ticking upward.

*The unemployment rate reflects the number of people in the workforce that are not employed but looking for full time employment.

Additionally, housing prices are up for the fourth consecutive month and serve as an additional sign the nation’s economy is waking up. Although housing prices are lower than last year this time, durable goods orders are lower than expected, and a steady increase of gas prices, any trace evidence of positive movement of the world’s largest economy is enough to promote investment in the nation again… translating to more jobs and economic growth for all…hopefully sooner than later.

The movements of the stock market reflect the confidence of investors in our economy’s corporate future. When upward or downward surges occur in the stock market, investors show their enthusiasm or distrust in the economy by purchasing or selling ownership in public-owned corporations listed on a stock market. By purchasing shares in a corporation, the investors feel confident they will profit in the near or distant future from partial ownership of that company. Investors sell of stocks to access cash, gain a profit from a stock reaching a certain price or out of fear of losing money. Investors base their decisions on a plethora of information provided by government agency reports, corporate financial statements or trends in an industry of which a corporation may hold a position. If the government issues a report that the military will need an additional 2 million tires a year for its fleet off vehicles, then public companies making tires may see an increase in their stock price, since they will improve profits by selling more tires.

At the end of every quarter (March, June, September & December) corporations report their “Profits & Loss” and other financial statements. The stock market reacts this information and the Dow Jones Industrial index and various other indices will shift up or down by causing a reaction from investors. So why does this all matter to most of us? This investor activity drives bank lending practices, rates and activity. Commerce is driven by these banks’ ability to lend to growing companies and thus creating a stable employment market and industry growth. You have a vested interest in the movements of thee stock market, whether you literally place money in one of the stock markets or not.