As investors increasingly put aside fears of economic calamity and focused again on fundamentals, the Dow Jones Industrial

Average broke through to its highest close since May 2008, back before the Lehman Brothers collapse and ensuing econo mic meltdown. The combination of strong job growth, a three-year low in unemploy ment, and other positive developments, propelled the Dow ahead 156.82 points, or 1.23%, on Friday. At this point, the blue-chip index would have to rise just 10 % to reach its record close of 14164.53, hit Oct. 9, 2007.[1] The biggest economic news last week surrounded Fridays Employment report from the Bureau of Labor Statistics (BLS), though the results are being heavily debated. According to the report, total nonfarm payroll employment rose by 243,000 in Ja nuary, and the unemployment rate decreased to 8.3%. The report added job growth w as widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing.[2]Sounds good , right? Skeptics argue the reason the employment numbers look so good is because 1.2 mil lion Americans dropped out of the workforce in January; they gave up looking for work. In simple English, if less people are looking for work, it looks like les s people need jobs. Also last week, the Congressional Budget Office released its projected employment outlook for the next few years, in which they predicted th e unemployment rate will be at 8.9% during the last quarter of 2012 and rise to 9.2% for the last quarter of 2013.[3] Those numbers arent so good. So whats the re al story? Frankly, it probably exists somewhere in the middle. Employment reports, like most other economic reports, are based on estimates. Li ke a thermometer, these reports can be used to take the temperature of the recov ery, not to diagnose it. They only tell us a little bit about one symptom. If we rely too much on one report, we set ourselves up for disappointment. It is much more effective to look at trends. What trend are we seeing? To quote a recent c ommentary from First Trust, Private sector jobs have increased for 23 consecutive months, total cash earnings are up 4.6% in the past year, and previous months da ta are being revised upwardly, not downwardly. The bottom-line is that the econo my is getting better.[4] Like a patient recovering from traumatic injuries, our economy is still going to have good days and bad days. It may not be completely well, but it is healing. Slowly, but surely.