Never underestimate the importance of expectations. While most of us were bracing for a poor jobs report due to the disruptive effects of Hurricane Sandy, the headline numbers of 146,000 jobs added in November and a four-year-low unemployment rate of 7.7% sent stocks higher in the minutes after the reports’ release. The Labor Department claimed that the effect of Sandy on the report was minimal, saying in a statement, “Our analysis suggests that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November.”

In other words, we should not look at this report as surprisingly good given the effect of the super storm. Rather, the Labor Department claims that the jobs numbers should be analyzed without taking the...