Dow Soars on Unemployment Numbers

The good news for Wall Street is that unemployment is rising -- the Dow surged 268 points following Friday's Labor Department figures that showed a 0.1 percent increase during February. "Traders had been nervously awaiting the unemployment numbers," says TIME senior business writer Bernard Baumohl. "Any further decline in unemployment or sharp increase in the nation's average hourly earnings raises the specter of inflation, which would prompt the Fed to raise interest rates." But the fears proved unfounded: The average hourly wage increase was 3.6 percent, where Wall Street's alarm had been set at 4 percent.

The employment numbers may have sparked another shopping spree on the Dow, but they pose a long-term challenge for Washington. While overall employment numbers remain around a quarter-century high, last month's loss of 50,000 manufacturing jobs raises the total lost in the past year to 337,000. Taken together with a ballooning U.S. trade deficit in the face of a global slump in global markets, that's a recipe for a new wave of protectionist pressure from the electorate -- and a big headache for a free-trade president.