Today the stock market is doing exactly what I would expect, sitting back and waiting to see what comes out of the big employment number tomorrow morning. I think wise investors should do exactly what the market is telling you to do, wait and see exactly what the employment picture shows. This goes for tomorrow’s report, which will let us know about December, as well as the reports in the coming months that will show us the picture in early 2010. As I have stated to readers of this blog many times in the past, I simply do not believe in the notion of a “jobless recovery.” I truly believe that any real recovery must be accompanied by a strengthening job market so that the consumer can feel more confident about their current situation and future prospects.

What kinds of things should you look for in the employment data to see if the trends are starting to look better or not? Look at the beaten down sectors such as manufacturing and see if there are any signs of life. Also, take a look at things like average wages and see if they are beginning to pick up at all. Sometimes the top line number of 10% unemployment rate or whatever it may be gets a little too much recognition in my opinion, since that doesn’t account for those who have stopped looking for a position. The trends have gone in a solid direction with smaller job losses of late, but we will definitely need to see some sectors other than the government and healthcare adding jobs for the market to continue its recent climb.

The bottom line is every single jobs number will be vitally important to the market for the next few months. As an informed investor I strongly suggest you start parsing through the numbers and not just looking at the top line!

In the last few days there has been a lot more talk about jobless recoveries and how maybe the current economic environment lends itself to a jobless recovery for the United States as well as other parts of the world. These thoughts have been started recently because of the disappointment from the jobs data while other parts of the economy appear to be stabilizing slightly.

What exactly is a jobless recovery? A jobless recovery is basically an economic turnaround that occurs without the help of the labor market. In this type of recovery businesses would start spending and investing more money, but would not hire new employees.

While a jobless recovery may be better than no recovery at all in some ways, it is generally true that a “jobless recovery” is not a lasting recovery. Jobless recoveries tend to gloss over the true underlying status of the economy and create a false sense of security for investors. The Gross Domestic Product of a country will improve during a jobless recovery, but many of the consumer related numbers are likely to continue to languish since the jobs picture doesn’t give consumers any real hope.

In the end a recovery without the aid of employment numbers is a recovery that is destined to disappoint. Consumers are responsible for 2/3 of the GDP in the United States, and almost that much in many of the other developed nations. If these consumers are without a job or have significant fears about the status of their job, they are unlikely to be very confident about the economy. How could we expect someone without a job to feel confident about the economy or want to spend any of the little bit of money they have?

As an investor you would be wise to not get your hopes up about a jobless recovery. An economic recovery that comes without the jobs picture improving is likely temporary and will only gloss over the real underlying issues that continue to exist.