Irrational Markets

The Department of Labor announced today that the "official" unemployment rate decreased from 9.5% to 9.4% during the month of July. Because of this "good news," the market climbed over 100 points today. However, after a closer look at the data, I would love to know why this was received as good news.

Buried in the announcement, as reported by cnn.com, was the following information:

• Although there was a net loss of 247,000 jobs in July (the fewest job losses since August 2008), the Labor Department's unemployment rate dropped due to revised job loss numbers for June and 237,000 people it stopped counting as unemployed (i.e. they became what are known as discouraged workers, they retired, or they went back to school)
• The average hourly work week increased to 33.1 hours, up from a record low of 33.0 hours in June (still not close to a full-time work week).
  
• The number of workers who wanted full-time work but could only find part-time jobs fell by 191,000, or 2%. By backing out that percentage, I arrive at the massive number of over 9.5 million Americans who are "under-employed."
• The number of people unemployed for more than six months reached a record high of nearly 5 million people.
• The average time of unemployment has reached 25.1 weeks, the longest ever recorded.
• According to FT.com, over 16% of people in the US are currently unemployed, underemployed, currently reskilling, or discouraged.

To make matters even more confusing, when ADP released their unemployment estimate of 371,000 jobs lost in July (which was higher than analysts had predicted) two days ago, the market dropped. So because someones guess came in worse than someone else's guess, the market went down? Why doesn't "the market" just wait for the official numbers to be released before pricing in that change? Why is there so much speculation involved?

Because I'm not an economist, I'll end this with two quotes from experts (from an article in at FT.com):

“A more hopeful sign would be a sharp increase in the rate of unemployment due to people re-entering the workforce” - Joseph Brusuelas, director of Moody’s Economy.com

“This is almost like you’ve had a 20 pound weight dropped [on your head] and now it’s a 10 pound weight: It’s still really bad news” - Peter Morici, professor of economics at the University of Maryland.