It was a great April non-farm payrolls labor report. The headlines read that job growth in the Unites States increased at its fastest pace in over two years, while the unemployment rate fell to a five-year low. Taking a peek beneath the headlines, however, all is not as it seems.

The report indicated that 288,000 jobs were created last month, dropping the jobless rate to 6.3%. That was above economists' expectation of a gain of 210,000 jobs. However, the number of workers looking for jobs declined by 806,000. Therefore, they are no longer counted in the employment statistics. Bottom line: a lot of Americans have given up hope in finding a job for good.

A breakdown of jobs was also more than a little disturbing. The most important age groups for jobs in America are those workers aged 25-54. They represent the bulk of our labor force as well as the most productive of all U.S. workers. The total number of their jobs fell from 95.36 million to 95.151 million-- a drop of over 200,000 jobs.

Employment for our younger workers also took a hit. Teenagers (16-19 years old) lost 24,000 jobs while those in the 20-24 age groups lost another 26,000. So who did gain those jobs? Funny enough, it was workers, aged 55-69, who gained 174,000 jobs. Government was also hiring, and both construction and manufacturing saw employment gains.

Clearly, the economy stalled in the first quarter, as a result of a bad winter and had a deeper impact than first thought on unemployment. We will know exactly how bad when the government releases the next revision of first quarter GDP growth. The last data point was growth of 0.1 percent. We might actually see negative growth for the quarter when all is said and done. However, I believe that the slowdown is behind us and that future quarters should see accelerating growth.

It is one of the reasons I believe that any pullback in the stock market will be contained over the next few months. The fundamentals of the economy will provide support for this market. Granted, we still need some kind of sell-off in the double-digit category to remove some of the excesses that have crept into overall valuations.

The markets also need time for economic growth to catch-up to market expectations. That process began in the beginning of the year. The sideways chop we have been living with since then is part of that process. A further decline that would last through most of the summer would be ideal. Who knows, maybe this century's madman, Vladimir Putin, may be the catalyst for such a fall.

I know that the majority of professionals are now expecting a sizeable pullback and being in the majority always makes me uncomfortable, but it doesn't make me wrong. I still expect the markets to grind higher, pushing stocks to record highs over the short-term. The Dow made its first record high of the year this week. The S&P 500 Index should breach 1,900 shortly. That's not saying much, since it is less than 20 points away from that level right now.

We could also see a bit of short covering once we make a new high. It could propel the S&P 500 a little further but after that, I am not expecting much. My most bullish case for the markets in the short-term is slightly higher highs with more sideways volatile action as May progresses. I am sure that on-going events in Ukraine will be supplying the volatility while day traders will continue to boost the markets higher until they don't.

Bill Schmick is registered as an investment advisor representative with Berkshire Money Management.