Every US jobs report from now until the newly employed start numbering two and three hundred thousand a month will be disappointing. Only at that point will the labor market be providing enough opportunities to keep pace with the growth of the overall workforce, including new entrants and those finding the confidence to strike out once again for work.

The fact is that we’ve been in unprecedented territory since at least late 2007, in whatever terms you choose to describe the situation. With every economic report in the US, Canada or elsewhere, there are nits to pick, and there are needles to be found. What’s different now, however, than during the “green shoots” era of late 2009 and early 2010 is that the underlying data reflect a subtle strengthening of private demand–in other words, that businesses are beginning to invest again.

That’s not to dismiss today’s report from the Bureau of Labor Statistics (BLS). The headline numbers and most of the underlying details of today’s the employment report were weak. Positives included small upward revisions to the September and October payroll reports, a slight increase in average hourly earnings, and a slight decline in part-time workers.
The negatives, however, include the unemployment rate increasing to 9.8 percent, 39,000 jobs added against expectations for triple digits, a decline in the employment-population ratio, a low steady participation rate, and an increase in workers unemployed for over 26 weeks. Forecasts suggest the unemployment rate will still be above 9 percent at the end of 2011 and 8 percent at the end of 2012.

That’s what’s called the worst employment recovery since World War II, the aftermath of the worst credit/market/economic crisis since the Great Depression, a story with which we are all well familiar by now. Yet the S&P 500, as of midday Friday, is pushing back toward its highest weekly close since the Mar. 6, 2009, Great Recession low after wobbling at the open. What’s the market pricing that economists, stock-pickers and pundits seem to be missing?

Let’s start with a subtle but important contradiction in seemingly sympathetic data sets.

The BLS reported today that total manufacturing jobs fell by 13,000 in November, making it the fourth consecutive month to post a small decline. On Wednesday, however, the Institute for Supply Management’s (ISM) monthly survey of manufacturing companies revealed a score of 57.5 for employment; any number over 50 in the ISM protocol indicates more companies are adding workers than are reducing employment. A number as high as 57.5 suggests that a large number of companies are hiring. November is the eighth straight month with an ISM employment number above 56–the first time in nearly 40 years there’s been a streak this long. Reconciling the difference between the BLS report and the ISM survey could mean an upward revision to the November payroll numbers.

The employment situation in Canada is markedly different than in the US, as you might expect given the relative strengths possessed by our northern neighbor heading into the recent madness, including the glaring absence of a subprime problem that wrecked the domestic housing industry. At the headline level the comparison could hardly be more favorable to Canada: The unemployment rate in Canada is down to 7.6 percent, more than two full percentage points lower than in America and the lowest rate in more than two years. Canada added fewer jobs than expected in November, though payroll additions were roughly in line with last month’s increase. The quality of the new jobs was weaker, however, as full-time positions declined while part-time jobs increased, the reverse of what happened in October.

The situation appears better for Canadian workers, but the overall American economy registered a better broad measure in the third quarter: Statistics Canada reported Tuesday that GDP growth slowed to an annualized rate of 1 percent north of the border during the 12 weeks ended Sept. 3, while US GDP growth was reported at 2.5 percent for the same period. Analysts were expecting annual growth of 1.5 percent in Canada.

That we’re experiencing a predictably unsatisfying recovery right now doesn’t make it any better. And the reams of data and the manner in which they’re reported often obscures the important stuff. Although Canada’s headline GDP number disappointed, like the BLS-ISM contradiction there is a positive spin: Fixed business investment has finally started to play a role in the recovery. Statistics Canada reported that business investment in plant and equipment recorded its strongest quarterly increase so far in 2010, as investment in machinery and equipment expanded 6.5 percent in the third quarter. Business spending includes residential construction, non-residential construction (commercial real estate and machinery and equipment) and inventories. Non-residential is the most important, comprising half the total of business spending.

The strong Canadian dollar will limit export-led growth, so non-residential and inventory investment will be critical to creating a robust, self-sustaining recovery in Canada. Low interest rates, government stimulus spending and tax cuts–in the Great White North as well as in the US–have kept people spending and encouraged business investment in residential construction to this point in the recovery. Non-residential investment declined dramatically during the recession and has yet to fully recover. There are signs in the latest Canadian GDP report that that could be changing as, business investment recorded its strongest quarterly increase this year.