Unemployment Picture a Matter of Perspective

NEW YORK (TheStreet) -- The nation's unemployment rate may have flattened in November, but heavy job losses expected in coming months will continue to provide fodder for argument between bulls and bears about the state of the recovery.

The Labor Department is expected to report 125,000 nonfarm payroll losses in November, compared to 190,000 jobs lost in October, according to the consensus estimate of economists polled by Thomson Reuters. The nation's jobless rate is expected to remain steady at 10.2%, a 26-year high.

But individual estimates are varying widely ahead of this report, with some predictions approaching declines of 200,000 and others forecasting a near flat result.

"I do think job losses will probably show up again in December and January and perhaps by February or March it will have hit bottom," PNC Financial chief economist Stuart Hoffman said. "I don't think November will be the bottom. If you believe that a bottoming out is a several months process, it might be the beginning of the bottoming out, but I don't think it means we've hit bottom."

And even if the job loss and unemployment numbers are near the consensus estimates, bulls will argue the slowing losses are a good sign, while bears will counter that the economy will be hard-pressed to grow until jobs are being created again. Investors are adjusting to the new normal, where a five-figure cut in jobs could be considered a market-moving win to the upside.

"I think that kind of drop is what it's going to take to move the market," LPL Financial economist John Canally said. "It's probably going to take a drop of 75,000 or 65,000 to actually jolt the market a little bit. Aside from that, if we get a number anywhere from down 100,000 to down 150,000, I don't think the market is going to care one way or the other."

Hoffman said, "If the November number showed a bigger loss than the average of the past three months, pending any revisions, that clearly would be a step backwards."