FORTUNE — I normally go on TV on employment Friday just after the monthly data release. I did not do so today; and it turned out to be a good thing as this morning’s report was particularly complex in terms of content and implications. No wonder the initial interpretations and market reactions evolved quite a bit as the report was analyzed more in depth — pointing also to bigger and durable issues.
“Disappointing” and “weak” — that was the initial take on the data release given the usual focus on a headline number that indicated a monthly job gain of only 113,000 (versus consensus expectations of 180,000). With that, stocks and stock futures sold off across the broad while U.S. Treasuries rallied. And if the analysis had stopped there, the initial take and market reactions would have held for a while — particularly given that the three-month average job gains had now declined to a rather disappointing 143,000.
After the necessary initial reactions were out, analysts and markets had more time to digest the meat of the report. In the process, they found quite a few offsetting signals. Accordingly, interpretations started to shift. Stocks recovered sharply over the next hour while bonds moderated their gains.
Notwithstanding the disappointing job creation headline, this morning’s report had some encouraging signals.
Long-term joblessness, a measure of the depth and likely duration of America’s unemployment problem, came down by 232,000 to 3.6 million. That pushed the one-year improvement to 1.1 million, also helping bring down the median duration of joblessness.
Also, encouragingly, both the labor participation rate and the employment-population rate went up. As such, the decline of the unemployment rate to 6.6%, its best level since October 2008, occurred for good rather than bad reasons.
Don’t get me wrong. Not all of the micro indicators were good. After all, youth unemployment, another important measure, rose to 20.7%. Moreover, average weekly earnings for those with jobs hardly budged.
The combined impact of all this goes well beyond attaching a “mixed” label to this morning’s employment report. It highlights three issues that will be with us for a while, specifically:
- The widely followed (and cited) headline numbers no longer provide a good snapshot of conditions on the ground. Today’s labor market is an increasingly complex aggregation of consequential segments with different conditions, dynamics, and policy implications.
- The Fed will no longer be able to focus on the unemployment rate as a key indicator for its policy stance. It will give more prominence to other variables, including an inflation rate that remains too low and a labor market that is quite fragmented.
- For their part, investors should no longer extrapolate future policy changes from the Fed’s previously-articulated “unemployment threshold.”
I suspect that we may get a lot more information on both these issues when Janet Yellen, the newly-appointed chair of the Federal Reserve, travels to Capitol Hill next week for her first semi-annual report on U.S. monetary policy.
In the meantime, the volatility in this morning’s analyst interpretation and market reactions is a further indication of something that will be with us for quite a while: As standalones, headline indicators of the monthly employment report will (and should) gradually give way to a much more holistic view of economic conditions and policy implications.
Mohamed A. El-Erian is the outgoing chief executive and co-chief investment officer of Pimco.