Unemployment: the drip, drip, drip of good news

The latest jobs numbers are another modest boost for the US economy. The best employment trend, though, may be what you don't see. 

The once-vaunted American jobs machine is moving again.

Not fast – and with the zip of a tricycle rather than a sports car. Still, after 14 consecutive months of job gains, the United States is again headed in the right direction, at least on the employment front.

It's getting easier to pick out bright spots: retail employment up 50,000 in November; professional and business services, up 33,000; healthcare, gains once again. Even the dramatic and unexpected fall of the unemployment rate from 9.0 percent to 8.6 percent – a mixed signal because half the improvement was due to workers leaving the workforce (a bad sign) – suggests that more Americans are finding work than the Labor Department's survey of employers is picking up.

"It does seem likely that the payroll survey is underestimating the improvement in the labor market," writes Nigel Gault of IHS Global Insight in an analysis. "The big picture shows an economy that has picked up steam in the second half of the year."

A big part of the improvement, though, is happening below the surface. American managers are getting better.

Faced with the longest and worst downturn in postwar history, which started four years ago this month, and a snail's pace recovery, they are finding ways to boost the profits of their companies to record and near-record levels. This goes far beyond the onetime improvements from big layoffs and other cost-cutting measures that took place early on in the Great Recession. This is the patient application of business principles that boost the bottom line.

A recession helps to sort out good managers from those who don't have good rapport with either customers or employees, says James Hertlein, managing director of the Houston office of Boyden, a global executive search firm based in Hawthorne, N.Y. After a downturn, "all of these became more important and far more visible. Today, people have a more hands-on approach. They have a better sense of what 's really happening in their organizations. They're listening more to their customers."

"We've seen our clients upgrade their executive talent through these cycles," he adds.

Companies appear willing to pay for good managers. Last year, the median base salary for MBAs rose to $94,500, according to the nonprofit Graduate Management Admission Council, which owns the GMAT entrance exam for business school. That was higher than the figure in 2007, before the Great Recession.

None of this is headline-grabbing stuff. It's as slow and boring as the recovery itself. But an amazing thing happens with managers who get really good with tricycles. They grow up.

When a better economy allows them to graduate to a sports car, watch out world. American business will be ready to roar.