The markets were ready for it.  Any bit of good news, no matter how unbelievable, that would drive the stock market and the dollar higher and crush the price of gold, which had just risen to a record high in terms of dollars.

The analysts were expecting another bad report with the consensus on Wall Street at 130,000 jobs lost.  ADP had released data the day before and said:

Nonfarm private employment decreased 169,000 from October to November 2009 on a seasonally adjusted basis, according to the ADP National Employment Report®. ...

November was the eighth consecutive month during which the decline in employment was less than in the previous month. Although overall economic activity is stabilizing, employment usually trails economic activity, so it is likely to decline for at least a few more months.

The ADP numbers are calculated from actual payroll numbers and they are in a very good position to do this:

The ADP National Employment Report^® is a measure of nonfarm private employment, based on a subset of aggregated and anonymous payroll data that represents approximately 400,000 of ADP's 500,000 U.S. business clients and roughly 23 million employees working in all 19 of the major North American Industrial Classification (NAICS) private industrial sectors. The ADP National Employment Report was developed to help meet the need for additional timely and accurate estimates of short-term movements in the national labor market among economists, financial professionals, and government policy-makers. Because ADP pays 1-in-6 private sector employees in the United States every pay period across a broad range of industries, firm sizes, and geographies, it has a unique and significant perspective on the U.S. labor market.

So what numbers did the government actually turn in on December 4th?  The Bureau of Labor Statistics claimed that the unemployment rate dropped from 10.2% to 10%, with the loss of just 11,000 jobs.  

Equity markets jumped and gold slumped 4% in one day, its largest drop in several years, following a stratospheric run-up to $1,218.25.

Perhaps the biggest surprise was the fact that the Wall Street models, which had forecast a net loss of 130,000 jobs -- and which fell in line with the ADP reported loss on Thurday, December 3rd, of 169,000 jobs -- had failed to forecast the reported unemployment rate. 

A closer look at the actual numbers provided by the Bureau of Labor Statistics showed a little tinkering with the way the numbers are reported, along with some numbers that were definitely NOT positive, such as the Civilian Labor Force Participation Rate (the percentage of people participating in the civilian labor force) which dropped from 65.1% to 65%.

So how did the number of jobless INCREASE, but the percentage of the workforce that was jobless DECREASE?  According to the National Inflation Association, 

Although the unemployment number dipped in November, we still lost 11,000 nonfarm jobs. Unemployment fell by 0.2% only because the civilian labor force shrunk in November by 98,000 people. This means more people are becoming discouraged and giving up looking for jobs. When you combine both short and long-term discouraged workers who aren't included in the labor force along with those who are underemployed with part-time jobs, real unemployment in the U.S. today is nearly 22%.

The most important area of employment to look at is manufacturing jobs. Increasing manufacturing is the only way for our country to truly recover and build real wealth, because it will allow us to cut down on inflation by exporting real products instead of the money we print. Unfortunately, the U.S. lost 41,000 manufacturing jobs in November and has lost 2.1 million manufacturing jobs over the last two years.

But there were pockets of growing employment, but unfortunately in areas of non-productive jobs -- again the National Inflation Association,

The main areas of increasing employment in November were health care and government jobs, which are non-productive jobs that are increasing global imbalances. These jobs are not being created due to a strengthening economy, they are being created due to our artificial, temporary and destructive stimulus. They are forcing our country to get deeper into debt and create massive inflation.

Those who receive a paycheck for a non-productive health care or government job, compete against all Americans for the purchasing of consumer goods, without an increase in the supply of goods. This means after excess inventories of goods are done being worked off, prices of all the goods we consume will increase at an astronomical rate that is unimaginable to most Americans today.

In addition, a large portion of the productive part of the economy has been shuttered in the past two years -- this will also put a cap on production of consumed goods and cause a price squeeze as printed money chases after scarce goods.  The outlook for those out of work is not good, according to Bob Chapman, who publishes The International Forecaster, 

A two-tenths percent change (even to the good) strikes me as much ado about nothing.  Nevertheless, the NYTimes cheers that “More than 50,000 temporary workers were hired, the first surge in months and often a precursor to companies hiring permanent workers.”  (But don’t retailers always hire thousands of additional temporary workers for the Christmas holiday rush?)

 “. . .  once the economy turns and hiring resumes, nearly 18 million people are likely to be vying for jobs . . . . In a strong economy, the work force seldom grows by more than 300,000 workers a month.”

These numbers indicate that if the economy became strong today and hiring resumed, it would still take another 60 months (at 300,000 new hires per month) to employ the current 18 million unemployed.   That’s five more years—minimum—before we get back to where we were in, say, early A.D. 2007. And that’s if the economy became strong today.  

Others see something similar, including Mish Shedlock in this interview with Yahoo Finance:

The November report was an "outlier" and "almost looked fabricated," according to Shedlock, an investment advisor at SitkaPacific Capital Management

Looking beyond the November jobs data, Shedlock says the odds of the unemployment rate coming down anytime soon are remote.

Why all the optimism...and why the November numbers spike?  It's the Holiday Shopping Season, a time when state and local governments collect much of their sales tax revenues for the year.  Media companies sell advertising to retailers.  If consumers realize people are still losing jobs, they might hold back on the all important spending at this time of year that large corporations and the government benefit from.  "Hiding the decline" apparently doesn't just happen to Climategate tree ring data.