Source: US National Archives 

If you read the headlines for employment news last week, you know the labor market bears were out and about. But dig deeper, and you'll discover an evolving labor market with more than a few hidden opportunities. Here's what you need to know.

The Hot Headlines
Recent employment news marked a new six-year low for the unemployment rate and a staggering 14-year low for new jobless claims. It should come as little surprise, then, that this past week's news didn't quite match up. While analysts had expected a slight 2,000 new claims bump to 280,000, claims climbed to 290,000, instead.

But weekly jobless claims are erratic, and longer-term trends point to a more solid picture. The four-week moving average edged up a smaller 6,000 to 285,000, and jobless claims have continued to decline at a surprisingly steady rate since 2010.

US 4-Week Moving Average of Initial Claims for Unemployment Insurance Chart

Mainstream media also focused their weekly efforts on the Labor Department's Job Openings and Labor Turnover Survey, or JOLTS. The September report highlighted fewer-than-expected job openings, as well as the highest level of quits since 2008. Headlines like "American Workers Are Quitting Like Crazy" didn't exactly inform the hype.

While the JOLTS report includes seemingly important indicators, last week's employment report beats it for two reasons: (1) it includes more recent October data and (2) it reveals ultimate labor market changes -- not just how Americans are moving in and out.

The real new employment news of this past week
For longer-term investors, two insightful reports came out this past week.

First, the National Federation of Independent Business, or NFIB, released its October Small Business Optimism Index, and things are looking up. Pushed ahead by capital spending plans and sales expectations, the 10-component index increased 0.7 percentage points to 96.1%, squeaking past analyst expectations.

While this is good news in and of itself, the Atlanta Fed's coinciding release of business inflation expectations creates a double-whammy win for the labor market. Not only did inflation expectations move up to the Fed's ideal 2% rate, but that push came primarily from predictions for labor cost increases. A full 71% of the Southern business owners surveyed predict "moderate to strong upward pressure" from labor costs over the next 12 months.

All those indicators point to one emerging trend behind employment news: Small businesses are doing well and they're expected to hire.

Since 2013, businesses with one to 500 employees have increased employment by 1.9 million Americans. In that same period, corporations with more than 500 workers added just 570,000 to their payrolls. Small businesses are the backbone of the U.S. economy, and the employment news paves the way for future expansion in the months to come.