Game Changer? Jobs Report 'Isn't Much News at All'

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In October, the jobs recovery finally showed signs of gaining traction. But in November, it looked like it was doing little more than spinning its wheels.

On its face, the first post-presidential election non-farm payrolls report provided reason for optimism: A better-than-expected 146,000 new jobs and a drop in the unemployment rate to 7.7 percent, its lowest level since December 2008.

But as it so often does, a look under the hood showed things weren't so rosy as they appeared. (Read More: Morici: Unemployment Rate Falls: More Quit Looking)

The October gain of 171,000 had been shaved all the way down to 138,000, and even a seemingly positive November number displayed some fundamental weakness.

"The stronger than expected monthly jobs report for November is good news, but jobs still elude the long-term unemployed and unemployment overall is still hammering millions of Americans," Christine Owens, executive director of the National Employment Law Project, said in a statement.

The group has been lobbying Congress to continue to provide 99 weeks of benefits to the 12 million Americans counted as unemployed, reasoning that the economy is still too fragile to reduce the program.

Friday's non-farm payrolls report gave the group little reason to change its position.

Though the total net job creation was substantially better than expectations, it essentially was in line with the meager average of 151,000 a month through 2012.

Also, more people quit looking for work, and the average duration of unemployment was at 40 weeks, near historic highs.

"The underlying details indicate a decline in the unemployment rate for the wrong reasons," Nomura Securities economists said in an analysis.

Buoyed by the notion that Superstorm Sandy did not impact the economy as negatively as expected, the stock market moved mostly higher though technology shares were weak.

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"There isn't a tremendous amount of good news here. In fact there isn't much news at all, which means that it's not going to move the needle in terms of monetary policy and it's not going to shift the view on the fiscal side," said Steve Blitz, chief economist at ITG Investment Research. "If you didn't have Sandy, this market would be selling off on these numbers."

Key areas such as construction and manufacturing either lost or maintained previous levels.

Housing is being seen by economists as one of the key drivers of a broader economic recovery, but the gains have been uneven. (Read More: Housing Recovery Depends on Slashing Mortgage Debt)

"Manufacturing unemployment has been essentially unchanged since May," said Scott Paul, executive director of the Alliance for American Manufacturing. "President Obama has laid out a goal of creating one million new manufacturing jobs in his second term. That won't be easy to do if we are merely treading water."

Even a boost in retail hiring, indicating a strong holiday shopping season, was tempered by a separate report Friday showing dimming consumer sentiment, particularly among higher income earners who fear the ramifications of the "fiscal cliff" of spending cuts and tax increases. (Read More: Consumer Sentiment Plunges in December)

"People are spending money they don't have and buying products they can't afford for Christmas, so you know they're going to hire people," said Peter Schiff, CEO and chief global strategist at Euro Pacific Capital. "We're wasting resources as a result of bad monetary and fiscal policies of the government."

Indeed, the real stakes behind the jobs report as far as policy is concerned is whether the Federal Reserve will continue its stimulus programs.

The central bank is wrapping up its Operation Twist program, in which it is selling shorter-dated notes and buying longer-duration Treasurys, and has kicked off an open-ended round of mortgage-backed securities purchases.

The November jobs report is unlikely to give the Fed and Chairman Ben Bernanke an impetus to change course, and they could even announce more aggressive quantitative easing at the Open Markets Committee meeting next week.

"The Fed can't shrink its balance sheet without collapsing the economy," Schiff said. "The Fed has to just basically maintain its PR campaign and we pretend we have a viable economy. We don't."