The U.S. unemployment rate dropped to a surprisingly low 7.8 percent in September from 8.1 percent in August, defying many analysts' calls in the process, but stocks erased earlier gains on the news amid suspicions the data don't indicate an improving labor market.
Investors are wise to view the data with healthy skepticism, said Mohamed El-Erian, CEO of Pimco, manager of the world's largest bond fund.
The economy added a net 114,000 jobs, the Bureau of Labor Statistics reported, adding its household survey reported that total employment rose by 873,000 in September, much of which was due to an increase in part-time work.
The number of unemployed Americans stands at 12.1 million, the fewest since January 2009, though keep the champagne on ice for now.
That increase in the number of part-time workers drove the headline rate down, while the 114,000 jobs that were created during the month isn't enough to absorb the unemployed and those entering the workforce.
"Overall it's a good report in the sense that we created over 100,000 jobs, unemployment has come down and critically the population-to-employment ratio is going up as are [average hourly] earnings, but we are being helped by part-time employment and the structural issues are still there," El-Erian told CNBC.
The U.S. still faces debts and deficits while growth remains sluggish.
"So overall it's a good report but the market is right to question how good it can be sustained."
Stock prices shot up earlier on the news, but many shares gave back those gains on sentiment that recovery continues at its tepid pace and marred by uncertainty.
Some accused the government of manipulating the data, including former General Electric boss Jack Welch, who strongly suggested as such on his Twitter page.
"Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers," Welch wrote, referring to President Barack Obama's performance in the first presidential debate earlier this week.
That's not likely, El-Erian said, as it is possible for data to show that the economy is creating only so many jobs a month while many more households are reporting family members are finding more work, even if it's just part-time.
"I say what we are seeing here is just a reality from month to month. Over time they tend to converge but in any one month you do get differences, and this month is one of them," El-Erian said.
"I don't buy the conspiracy theories. There are certain people at Pimco who do, and I respect their point of view. I don't buy it. I think that this is just what happens when you have two different ways of connecting data."
Up to now, the Federal Reserve has fueled recovery by slashing interest rates and injecting liquidity into the financial system by buying bonds held by banks, a monetary policy tool known as quantitative easing that weakens the dollar and sends stocks rising.
The European Central Bank (ECB) has unveiled similar policy tools in the recent past as well.
Sooner or later, governments in industrial countries need to get their fiscal houses in order by narrowing deficits and paying down debt while maintaining pro-growth policies at the same time.
"So far we have had a correct rally basically by chopping off the tails of catastrophe between what the Fed has been doing and what the ECB has been doing. That has reduced the tail risks in the short-term," El-Erian said.
"But in order to keep going, we need to hand off the fundamentals, and today's unemployment report, while better, is not strong enough for that handoff."
Welch's Twitter comments, meanwhile, sparked a wave of debate over conspiracy theories involving the government cooking the data, which officials dismissed.
"This is a methodology that's been used for decades. And it is insulting when you hear people just cavalierly say that somehow we're manipulating numbers," Labor Secretary Hilda Solis told CNN.
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