But instead of an instant drop in stocks following the April jobs report, the tech-heavy Nasdaq 100 soared more than 1%.
The centerpiece of this apparent disconnect is inflation, which is the biggest risk facing stocks right now, according to a recent Bank of America survey.
But the significant labor-market weakness indicated by the April jobs report has investors shrugging off inflationary concerns for now.
Going forward, now that the economy doesn’t appear as red-hot as many have thought, inflation expectations decline further.
April’s jobs report gives credence to Fed Chairman Jerome Powell’s committment to not even talk about talking about tapering its monthly bond purchases or raising interest rates.
There are varying explanations for why more Americans are not rushing back into the job market.