Why Gobs of Jobs Send Stocks Soaring Skyward

That's the kind of news the market likes to hear. The Labor Department Friday sent the Dow scooting up 300 points to a record 11,340 and NASDAQ blasting up to 3,500 for the first time. The impetus was an unemployment report that contained the best possible scenario for Wall street — continued healthy job growth but no sign of wage inflation. "In investor psychology, the unemployment figures are the most important of all economic indicators," says TIME senior business writer Bernard Baumohl. "It indicates both the strength of the economy and the potential for inflation, and Friday's report showed a healthy economy with no sign of inflation. That means the Fed has no reason to raise interest rates at least through the first quarter of next year."

Although the Dow later backed off the record high, the euphoria may be a product of a paradigm shift in the shaping of economic indicators. After all, it seems counterintuitive that wage inflation wouldn't increase with the ever-expanding job market. "But this may show some things about the new economy," says Baumohl. "Increased productivity means that even though new jobs are being added, the prices of consumer goods aren't rising. And a growing number of employees are being at least partly rewarded in ways that don't show up in hourly wage inflation figures — extra benefits, bonuses and stock options." It may be a gilded age, but gold isn't all that glitters.