The April jobs report came out at 8:30 am eastern time, as usual. The headline figure was a gain of 175,000 jobs. This compares with the Wall Street guess of +240,000. The S&P and NASDAQ both shot ahead on the news by over a percent. The Russell 2000, which is comprised of mostly domestic companies, rose even more.

The general sentiment behind the move is that the domestic economy, already at full employment, is finally beginning to slow, giving the Fed room to lower short-term interest rates. This would be good for stocks. The reasoning is that cash would become less attractive, bond prices would rise–causing the price of other liquid investments (mainly stocks) to go up in sympathy.

It’s possible that Wall Street economists are uncannily accurate in forecasting this monthly number and that’s the information here. Not my impression, although I haven’t done careful enough research to say for sure.

The more important thing is that something like 3.5 million people leave their jobs each month, and more or less the same number start new jobs. The headline figure is the difference between the two. The Labor Department figures it’s accurate to within +/- 100,000 jobs. Also, because of lags in reporting by companies in the survey, the initial figure is subject to revision in each of the following two months before the final number is arrived at.

So how can a preliminary number that’s within the margin of error of Wall Street estimates cause a significant market move?

To me, the answer has always been that the market isn’t anywhere near as efficient as academic theory maintains. Two implications for you and me: we can make money by finding areas where we are confident we know more than the market does; and, just as important, we should avoid betting on things like the jobs report, where the market is loony.