The rebound that has rippled through financial markets has allowed investors to ignore the rising casualties and collateral damage to economies from the financial crunch and recession.

Markets are now up for four weeks in a row and will be trying hard to rise this trading week: and they will focus on anything but the real story on the economy.

The big line from analysts around the world is that economies have stopped falling and conditions are now “steadying”. That’s been enough to spark a bull market by traditional stockmarket definitions: up 20% in four weeks and up nearly 25% since 12-year lows were touched around March 9 for Wall Street. China is up 30% this year, ignoring damage toll and focusing instead on the green ‘shoots’.

But in their haste to ride the surge, traders missed a ominous parallel on Friday: the Dow has jumped 21.5% in the past four weeks, its best four-week run since 1933, when it gained 31%.

That’s a statistic many traders would have recoiled from six weeks ago as Citigroup and Bank of America tottered and AIG sucked in more taxpayer billions.

But now it’s just incidental information to be ignored in the same way traders in American markets shrugged off terrible employment figures for March (European markets at least had the grace to fall Friday on the news). It shows us why this boomlet is bound to end in tears and big losses.

In fact the Financial Times Lex column summed up the boomlet: “It is also the hallmark of a bear market rally — a brief spurt when bad news is brushed aside before it comes crashing back…it is the trash that has done best.. AIG’s share price has almost tripled while Citigroup’s has doubled.”

That’s not a sustainable: traders have lost sight of what’s important: it’s not rising stock prices or greenshoots, it’s healthy banks and prosperous homeowners and consumers.

There were no “green shoots” in America’s employment figures for March. In fact, it’s a disaster zone, barren. The headline numbers were bad — the unemployment rate jumped to 8.5% in March, the highest since late 1983, 663,000 jobs were lost.

But that means 5.1 million jobs have gone since the recession began in December 2007 and of those the March quarter saw 2 million jobs alone vanish.

The number of unemployed Americans increased by 694,000 in March 2009, reaching a total of 13.2 million. That figure has grown by 5.3 million since March 2008.

But the reality is more miserable: if part-time and discouraged workers are added in, the underemployment rate would have been 15.6% in March, the highest in records dating back to 1994 when these figures were started. That was up from 9.3% in March last year.

Of course, rising unemployment brings home losses and poverty (We read Friday that one in 10 Americans, that’s 32 million people) were receiving government food aid in January. The figures for February and March will be higher simply because the pace of job losses and home foreclosures stepped up.

But bankruptcies are also on the rise. According to a company called Automated Access to Court Electronic Records, which keeps track of court filings, an average of 5,945 bankruptcy petitions were filed each day in March, up 9% from February and up 38% from March 2008. In all, 130,793 people filed for bankruptcy in March.

That’s not good. And it won’t be the last we hear of this part of the slump either.