The case for optimism got a little tougher to make in the wake of the November job report on the U.S. economy. Not only were payrolls cut by 331,000 nationwide last month, but the job figures for October were restated to show an even larger job loss for that month than originally published. Those job cuts pushed the overall employment decline beyond the 1.2 million job mark since the recession officially began in March.

But even though these losses make the hole the economy must dig itself out of that much deeper, they also fit into a scenario that calls for a turnaround in U.S. economic growth, possibly as early as next quarter. That promise may seem empty to those businesses, workers and governments who are feeling the brunt of the slowdown right now. But the experience of previous recessions tells us that this downturn may be nearing an end.

That optimism does not extend to the present. Most forecasters are expecting the data to show a sharp contraction in economic activity in the fourth quarter, and so far the economy is delivering on this promise. The steep declines in payrolls in the last two months, coupled with the still plunging rates of factory production, virtually guarantee this result.

You certainly won't find any slivers of hope in the November job report. The last two months have been grim in virtually every corner of the economy. Outside of thehealth services industry, which continues to operate in apparent isolation from the rest of the economy, payrolls took a beating. Job cuts in manufacturing, of particular concern in Indiana, showed no letup. Aside from motor vehicles, whose production schedules were kept afloat by zero percent financing of cars and trucks, every sector took a significant hit. There were 873,000 fewer durable goods industry jobs in November 2001 than there were twelve months earlier.

The pattern of job cuts in the overall economy reflects the sharp cutbacks in business spending that have characterized this recession. One of the biggest losers, the temporary help services industry, only twelve months ago was a picture of health and vitality. Similarly, electronic equipment manufacturers, propelled by the seemingly endless demand for computers and communications equipment, have sputtered badly since last fall.

But what goes down can also go up. Most observers expect the impact of the Federal Reserve's unprecedented aggressiveness in cutting interest rates to start showing up in business spending in the next few months. After accounting for inflation, the last rate cut already pushed interest rates down to zero for some loans, with the possibility of still more rate cuts ahead. If consumer spending can remain reasonably stable until then -- and that's a mighty big if -- we can expect to see the overall economy make its first steps towards recovery and growth.

That won't help the labor market out much, at least for a while. Even a rebounding economy won't be enough to produce much meaningful job growth, or to keep the unemployment rate from rising beyond November's 5.7 percent mark through much of 2002. It has taken the economy almost a year to dig the hole we're standing in, and there's no easy way to shorten the time it will take to get ourselves out.