While Friday's monthly jobs report sent stocks lower because of a weaker-than-expected headline number, the data actually showed signs of strength.

The Labor Department said the economy added just 51,000 new jobs to nonfarm payrolls in September -- its weakest performance by that measure in almost a year. That figure fell well short of expectations on Wall Street for 120,000 new jobs.

The unemployment rate, however, ticked lower to 4.6%, reflecting continued mixed signals between the government's household survey and its establishment survey.

Meanwhile, the preliminary estimate for the Labor Department's annual benchmark revision to its monthly payroll figures projects that 810,000 additional new jobs will be added to the numbers going back through March.

"This report was actually stronger than expected, mainly because of the revisions," says Paul Nolte, director of investments with Hinsdale Associates.

For July, the government revised its estimate for nonfarm payrolls to 188,000, up from the 128,000 it reported a month ago.

"With these revisions, you're looking at an average monthly growth rate of 175,000 jobs," says Nolte. "The market reaction to look at here is the fixed-income market."

Treasuries, which have been trading up lately on expectations of slowing economic growth, dropped 18/32 in price to yield 4.68%. The slumping housing market has led to widespread predictions of a slowdown in the economy and consumer spending, but those predictions have yet to be proved right.

"This report goes a long way in explaining why the economy has been in better shape than everybody was anticipating," says Nolte. "Investors were pricing in a 50-50 chance that the

Federal Reserve

was going to be cutting rates in the first quarter of next year, but that is no longer the case. The Fed is still on pause, but these numbers provide a much stronger economic backdrop for their decision-making."

Average hourly earnings, a key inflation metric, rose 0.2%, falling short of economists' expectations for a 0.3% increase.

Richard Yamarone, chief economist with Argus Research, describes the reported wage growth as solid.

"The Fed is going to frown on this report," says Yamarone. "There's no good reason why this report should be painted as weak. This explains why consumers have been so willing to spend lately."