There are two fundamental aspects to the unemployment equation: jobs lost and job creation.

What's striking about this recession, compared to other recessions, is the dearth of job creation since the end of 2008. In the 1st Quarter of 2009, 50,000 fewer jobs were lost than in the 4th Quarter of 2008. But the unemployment rate shot up because there were 1 million fewer jobs created in 1stQ 2009 than 4thQ 2008. Half a million fewer jobs were lost in the 2nd Quarter of 2009 than in Q4 2008. But there were also over 300,000 fewer gross jobs created in Q2 2009 than in Q4 2008.

The job loss figures are dramatically improved from where they were a year ago when we were losing 600,000+ jobs a month. We're now teetering around the point where we should go into positive territory in the next few months, maybe next month. But the expectation for Friday's release of the initial monthly employment figures for February is that the number will again be negative. Though not as horrible as last summer or spring. We'll know in a few hours. And then the numbers will be revised again in a few weeks.

Lack of job creation is the problem. It's nowhere near where it needs to be. We can speculate about why. Credit is still relatively tight but, moreover, there's an aversion to debt. Companies have been hoarding cash for the past year. Employers have varying views of future trends in consumer spending, taxation and regulatory burdens and other factors that affect costs.

Two million unemployed have given up looking since last May so they aren't factored into the current unemployment rate, which would be well over 11% if the labor participation rate hadn't dropped 2% in the recession.

The officially unemployed have now been out of work -- on average -- for over six months. That shatters the records since this particular data first started being collected in the late 1940s. In normal times, unemployed persons are out of the workforce for an average of 8 weeks before they find a new job.

Our economy needs to generate, on average, over 150,000 jobs each month just to absorb the constant new entrants into the workforce. We're going to need 10 million new jobs to get back anywhere near full employment. Nearly all of that has got to be private sector. We'll need three or four years of 4% or more GDP growth to accomplish that.

Even when the economy is considered to be very strong, there's a lot of churn in jobs. Millions of jobs are lost, in good times. Some businesses fail, others layoff. People quit. But there is nearly always a lot of job creation going on. Mostly in small businesses and young businesses. Nearly all the net new job creation in the past 25 years was by businesses less than five years old.

Employment figures are always a lagging indicator. The Fed released the latest "beige book" and there are signs of modest improvement in 9 of the Fed's 12 regions. Manufacturing figures are indicating growth. But until job creation is bringing millions of people back into the workforce, there will be significant downward pressure on prices.

I'm the eternal optimist when it comes to this country. It's going to be a slow slog but we'll come out of this, eventually.

I dare not say much more lest I teeter on the political.

The unemployment rates for more educated and skilled workers are significantly lower than the overall unemployment rate. So if you can burnish your pedigree and skills, now would be a very good time to do so.