Is the U.S. economy improving, or are we still struggling with recession? After a close look at the most recent jobs numbers -- released last week while the stock market was closed for Good Friday -- the answer to that question is definitely "yes."

In other words, depending on exactly how you look at it, the labor market is telling us that there is a real recovery getting started. But at the same time it's telling us that things are as bad as ever.

Since the report the stock market has crept up to new recovery highs. But it doesn't seem to be running away to the upside. Stocks seem to agree that the economy is still touch-and-go.

Let's take a closer look at the jobs report.

On the plus side, with 162,000 net new payroll jobs in March, we had the first triple-digit gain in payrolls since November 2007. That's true even if you take away the 48,000 temporary jobs generated by the 2010 census.

That said, this puts us only one month off the lows. As of February, just one month before, we'd lost 8.363 million jobs from the pre-recession peak. The number was the same in December, after which a small gain in January gave us a false start. Was March's gain another false start? Who knows, but it's an indisputable fact that we're really only one month of the very bottom.

But there are some clues that this one data-point could nevertheless be the signal of a new upward trend in jobs. Jobs in the private sector -- in other words, jobs outside of government -- have been growing now for three months, not just one. True, the private sector has been the recipient of a lot of government "stimulus" money, but there's still a difference between a real job created by a real company, versus a make-work job created by the government.

So three months of growth does tell a good story.

The problem is that the jobs market is like a leaky bucket. Yes, we're beginning to pour water into it. But it's so leaky, the water level isn't rising. What I mean by that is that it's not enough to create new jobs. We have to create enough new jobs to make a difference, and so far we're not doing that.

You can see evidence of that in the unemployment rate. It's off from its high of 10.1% last October, but only down to 9.7% -- which is still a horrible number. But what worries me is that the unemployment rate went up this month, not down. It wasn't enough to change the headline number -- it was reported as "unchanged." But it was actually up, and that's moving in the wrong direction.

How can the unemployment rate rise when new jobs are created? Simple. The rate is calculated by taking the number of unemployed as a fraction of the labor force, which is defined as all the people either working or looking for work. Even when more people are working, the number of unemployed can still rise, if new people enter the labor force looking for a job but unable to find one.

That's just what happened in March. According to the Labor Department's "household survey" which is used for the unemployment rate -- separate from the "payroll survey" that is more widely cited and used -- there were 264,000 new jobs in March, but at the same time the number of unemployed went up by 134,000.

How about that? We have rising employment and rising unemployment at the same time!

The more people who have jobs, the more income they earn, the more they spend, the more the economy grows. It s all good. But that doesn't change the fact that an increasing number of people are unemployed, and so far the economy isn't strong enough to do anything about that. It s no wonder the stock market doesn't quite know what to do!

Here are some of the implications. Even with more people working, the chance of getting a job if you are currently unemployed has fallen to a new all-time low (the data begins in 1948). As of March, if you were out of a job, the probability that you'd get a job that month was only 18.7%. Let's express that in the language of horse betting. The odds are about 5-to-1 against you. You are a long-shot.

Also, in March, the number of people working part time -- but who are ready, willing and able to work full-time -- rose by 263,000. That's only 1,000 less than the growth in employment of 264,000. We could almost say that every new job created in March was a part-time job, taken by some disappointed person who really wanted a full-time job.

This is a portrait of an economy that is no longer deep in recession. The economy is recovering. But it's not really growing, either. It's just stabilizing, catching its breath, hopefully preparing to grow.

It's important for investors to appreciate those distinctions. The stock market has made an historic run this last year, as investors realized that the world was not going to come to an end, buried in the wreckage of a global banking crisis. A great deal of stocks' recovery has simply been relief -- taking off the table what was the very real possibility that everything would go to zero.

Fine. It's not zero. But at this point, it's been there, done that. What do we do now? For stocks to appreciate much more, there has to be some actual solid growth.

I think we will see that growth, but it's going to require some patience. And with investors having just experienced a 74% gain in stocks in a little over a year, right now patience may be in short supply. If you got into this rally late because you didn't want to be left behind, I'm afraid you'll find that its best days are already behind us.

As the economy struggles to really grow again, and investors come to terms with the reality that we're not in a new rip-roaring economic expansion, I think that stocks will struggle. It's going to be a choppy year, and it wouldn't surprise me one bit to end it not much higher than where we are now. Year-to-date the S&P 500 has returned about 6.6%, including dividends. Maybe we get 10% or 12% this year.

Just remember that the 74% gain we got from the March, 2009, lows followed a 59% drop from the 2007 peak. You get big gains after big drops. You don't get big gains after big gains.