According to firstthings.com:
"When Luther says good works do not make a person good, he means that they do not justify. He doesn’t mean they can’t be considered good on the horizontal, person-to-person level: a person can be a good human being without being a Christian, after all. But without faith, those works are not capable of making one righteous in the eyes of God. Righteous acts can be considered righteous on earth and still be filthy rags before God."