Americans, rejoice! Massive job cuts are nearly over! Unemployment will soon begin to fall!

Well, at least that might be the impression you might have gotten from last week's surprisingly upbeat jobs data. To almost everyone's surprise, economic data showed that employers only shed 11,000 jobs in November, and the unemployment rate dropped a bit to 10%. Economists reacted in large force by calling this a turning point in the economic recovery. But if you think this means the dark days are completely behind us, think again.

Not out of the woods yet
The fact that we can celebrate losing "only" 11,000 jobs in a single month shows just how bad things had gotten in previous months and how desperate we all are for a piece of good news. Let's be clear -- last month's job data is a positive step. Last month marked the fewest job losses since the recession began two years ago. The overall trend has been toward a significant drop in the number of corporate layoffs. And considering the economy lost roughly 700,000 jobs just this past January, we've definitely come a long way.

But investors should be careful of putting too much stock in any one particular monthly data reading. While it's true the overall trend in job losses has been heading down, there's no reason why December's jobless data may not spike back up. Furthermore, odds are pretty good that unemployment will head higher into 2010. While we're currently sitting at 10% unemployment, some economists think the rate will top out somewhere closer to 10.5% or even 11% before it starts heading back down later next year.

Moreover, there's more bad news behind the headline numbers. While mass layoffs are ebbing, the average length of unemployment is actually increasing, meaning that it's taking longer for folks to find jobs. Moreover, even once the economy starts generating jobs, many believe it could take three years or more to create enough jobs to replace those lost during this recession. We're likely to be dealing with high unemployment for a long time to come.

Adjusting to a new reality
Although it's cold comfort for people who are unemployed or underemployed, it's important to remember that employment is typically a lagging economic indicator. That means that unemployment tends to rise long after a recession has ended, since businesses generally wait to see evidence of a pick-up in economic activity before hiring again. So, while this level of unemployment is truly painful to see, it's not completely unexpected, given the shocks the economy has endured in recent years.

If we're going to be muddling through an extended period of persistently high unemployment, investors need to alter their game plan a bit. That may involve getting a little more defensive in their portfolio, and stocking up on names more likely to do well in challenging times. Consumer staples stocks are a pretty safe bet here, since people still need to buy basic food and everyday living items. In this case, you might want to think about names like Wal-Mart (NYSE:WMT), Kellogg (NYSE:K), and General Mills (NYSE:GIS), all of which have forward price-to-earnings ratios of 15 or less. These kinds of stocks won't be flashy, but they have the staying power to compete in a slow-moving, slow-growth economic environment.

Healthy options
Another area of the market that's typically thought of as defensive is health care. However, there are also some pretty decent long-term growth prospects hiding in this sector as well. If you don't want to resign yourself to the slow, steady growth of consumer staples names, take a look for some winners in this sector.

For example, Ron Muhlenkamp of the Muhlenkamp Fund (MUHLX) has invested nearly 20% of his portfolio in health-care names like Pfizer (NYSE:PFE), medical device maker Kinetic Concepts (NYSE:KCI), and UnitedHealth Group (NYSE:UNH). Given the increasing importance health care is likely to play in our nation's future, these names are in a prime position to benefit from a boost to this sector. Interestingly enough, Muhlenkamp also has a pretty decent allocation to beaten-down financials like Bank of America (NYSE:BAC), which he thinks will benefit as consumers save more and spend less during the recovery period.

At any rate, a period of robust growth is likely not in the cards for the U.S. economy in the near future. That means adjusting to the realities of continued high unemployment and adjusting investment expectations to match. Investors who employ a well-diversified approach to taking advantage of this new environment will be the ones who will end up in the best financial position once sunnier economic days finally arrive.