So a few of our savvier economic pundits are thinking that we've reached the end of the recession, at least in technical terms.

Hooray?

Pardon me if I don't seem excited. What's getting me down is the unemployment rate, which is officially at 10.2% -- but really, it's even worse than that. What that number doesn't include is the number of people who are underemployed. These are the folks whose employers have them working part-time when they'd prefer to be working full-time, those working at their local Starbucks (NASDAQ:SBUX) because they've been laid off from a much better-paying job at a bank (though don't get me wrong: Starbucks has its own problems), and so forth.

That number -- what the economic wonks at the Bureau of Labor Statistics call the "U-6" calculation -- hit 17.5% in October.

Think about that. One out of every 6 American adults who want to work and are available to work is either not working at all or works less than they'd like. That's a lot of households looking at lean times. That's a lot of households that aren't upgrading to iPhones or buying big new TVs or eating at nice restaurants, much less buying new cars or bigger houses.

Retailers like Target (NYSE:TGT), Abercrombie & Fitch (NYSE:ANF), and Home Depot (NYSE:HD) have reported "comps" -- same-store sales compared to this time last year -- down across the board. Even mighty Wal-Mart (NYSE:WMT), a company many expected to thrive during tough times, is seeing falling comps when you exclude fuel sales. There's a lot of worry across the board about the holiday season. Folks still aren't spending.

And even for those who are still employed and still making what they were two years ago, there's less credit available for things like houses, which means that builders like Toll Brothers (NYSE:TOL) and Pulte Homes (NYSE:PHM) probably won't be calling back laid-off workers, won't have work for idle subcontractors … and the cycle continues.

An awful lot of Americans are still feeling economically vulnerable, even if their finances are in decent shape. Those people aren't spending, not in a big way.

And if nobody's spending, and nobody's going to be hiring anytime soon, where's the recovery?

We may be stuck here for awhile
Economist David Rosenberg of Gluskin Sheff recently pointed out a longstanding historical pattern -- unemployment tends to peak some time after the technical end of a recession.

Put another way, our unemployment number might well rise for a while longer. Rosenberg thinks it'll peak around 12%-13%, which seems reasonable to me. And there's a good argument to be made that it'll stay near that level for awhile as those underemployed people get ramped back up to full-time status. In other words, we may see that U-6 underemployment number start to fall even as the headline unemployment number continues to rise.

All that makes me conclude that tight household budgets are likely to be with us for some time. Again, if a bunch of people don't have a paycheck to spend and nobody's hiring, where's the recovery?

The Fed, the bubble, and you
Meanwhile, the Fed has signaled that it's expecting things to stay "suboptimal" for a while yet, possibly into 2011, and that it will keep interest rates at dirt-cheap levels until employment picks up. If you buy the theory that cheap Fed money is the driver behind the stock market's recent impressive gains, then it's reasonable to conclude that this run will continue for a while yet.

Of course, timing the big correction at the end could be tricky, and I don't advise trying. What I do advise is that you take a long, hard look -- right now -- at how much risk you're taking with money you might need in the next several years. If you're inclined to sell in order to reduce your exposure to the stock market, sell soon. If you're investing new money in stocks, focus hard on valuations -- there are still bargains to be had, but you need to look carefully.

Long story short: Remember those moves you wish you'd made in the summer of 2008, before the crash? This might be your second chance to get it right.

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Fool contributor John Rosevear has no position in the companies mentioned. Starbucks is a Motley Fool Stock Advisor selection. Home Depot and Wal-Mart are Motley Fool Inside Value selections. The Fool owns shares of Starbucks and has recommended a bear put spread on Abercrombie & Fitch. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.