Coming Week: Recovery Taking Hold?

NEW YORK (TheStreet) -- After a bumpy week of trading that ended with surprisingly positive news, investors next week will keep trying to gauge whether the economy at last has begun to regain its footing.

The Labor Department's jobs report that buoyed the market on Friday sent the bears into hibernation. The report showed that employers cut fewer jobs last month than had been expected and that the unemployment rate declined slightly to 9.4%. Still, July ended with 247,000 more people out of work, and when counting the number of frustrated ex-workers who have simply stopped looking for a job -- and are not tallied in the official unemployment rate -- the percentage of Americans who are unemployed actually increased.

Of course, the jobs report was still a good sign that the economy is beginning to move toward recovery, but is not a panacea in and of itself.

"This report gives heart to those who believe the economy is trying to turn," said John Wilson, a strategist at Morgan Keegan, in a report Friday. "But it also sets us up for a disappointment if any future reports don't reinforce this morning's news."

Other positive economic signals came from an expansion of the "Cash For Clunkers" program, which stands to help struggling automakers like General Motors, Ford(F Quote) and Toyota(TMC Quote), as well as signs that American International Group(AIG Quote), Fannie Mae(FNM Quote) and Freddie Mac(FRE Quote) -- among the most troubled companies in the country -- were moving forward on the path of reorganization to become independent again.