The nation's payrolls shed just 11,000 jobs last month - the smallest number of cuts since the recession began and a sign that the labor market is beginning to stabilize. The unemployment rate dropped to 10 percent, from 10.2 percent, the Labor Department reported yesterday.

"It is a very nice shot of holiday cheer for everyone," said Robert Dye, senior economist for the PNC Financial Services Group, in Pittsburgh.

As a preholiday package, the report contained a couple of little treats:

The average workweek increased by 12 minutes, to 33.2 hours a week, and manufacturing added 18 minutes, to 40.4 hours a week. Overtime hours are also up in manufacturing.

"That means they are using their existing workers more," Dye said, "and that is indicating they will be looking to hire workers as they max out their existing workers."

Temporary-help services added 52,400 workers. "The temporary sector has been growing sequentially since July," said William Yoh, chairman of the Yoh Group, the staffing component of the Day & Zimmerman Group, a Philadelphia engineering company. Yoh is also treasurer of the American Staffing Association, a trade organization.

Yoh said that in the past, solid job growth trailed growth in temporary staffing by three to six months because employers begin to need help but remain nervous about committing to new hires.

The October job situation turned out to be not as bad as the Labor Department had said last month, when it reported that 190,000 jobs were lost in October. The revised number is 111,000 jobs.

The number of people employed has increased 227,000, while the number of people unemployed decreased 325,000 (factoring in those who left the workforce).

"We are in the healing phase," said Joel Naroff, president and chief economist at Naroff Economic Advisors Inc., in Bucks County, "and while it may be quite a while before positions become readily available, the hope is that fears of losing jobs will abate."

But don't break out the eggnog yet.

The economy has lost 7.2 million jobs since the start of the recession in December 2007. Meanwhile, the economy needs to create 120,000 to 125,000 jobs each month simply to stay even with the new people entering the workforce.

The number of unemployed people is still close to 15.4 million, and there is not enough confidence in the strength of the labor market for discouraged workers to start looking or for people who have simply opted out to start circulating their resumés. The labor force (the number of people working plus those who are looking) declined nearly 100,000 people, the third straight month of declines.

The participation rate, or the percentage of the adult population employed or looking for work, fell to 65 percent, the lowest since the recession began. Once laid-off people stop hunting for jobs, they are no longer counted in the unemployment rate.

If part-time workers who want full-time jobs and laid-off workers who have given up looking for jobs are included, the unemployment rate is 17.2 percent, down from 17.5 percent in October.

The length of unemployment continues to grow, with the average duration at 28.5 weeks, up from 18.9 weeks a year ago. Another increase: 38.3 percent of those who lose their jobs are out of work for more than 27 weeks.

"The economy stinks right now," said Garfield Rodgers as he loaded picket signs into a bus Thursday.

The unemployed Mount Airy custodian was one of three dozen activists and unemployed people who headed to Washington on Thursday to picket for jobs and extended unemployment benefits. "There are too many people out of work."

John Dodds, director of the Philadelphia Unemployment Project, said politicians needed to have the will to set up a public-works project, much like the Works Progress Administration that President Franklin Roosevelt created during the Depression.

"We need a new WPA," said Dodds, who organized Thursday's bus trip. "There's lots of cleaning up and painting that needs to be done. But you have to have the political will to spend something to make it happen."

Whether the politicians in Washington will be receptive remains to be seen.

A study by the John J. Heldrich Center for Workforce Development at Rutgers University in New Brunswick found that 69 percent of those polled in a November survey believed that the nation could no longer afford to take on debt, even to stimulate the economy.

"Our survey reflects the growing impatience and frustration of American workers about a recession that has lasted nearly two years," said Carl E. Van Horn, a co-author of the study, the director of the center, and a professor of public policy.

"The president and Congress face a very difficult dilemma," he said. "American workers want more jobs, but they do not want the government to borrow more money to pay for programs, or tax cuts that might generate them."

Democrats in Congress, meanwhile, are considering legislation that would extend jobless benefits for those who have run out and help the unemployed pay for health-care coverage. Those measures could cost as much as $100 billion.

The economy has now lost jobs for 23 straight months, but the small decline in November indicates that the nation could begin generating jobs soon. Many economists think it will happen in the first quarter of next year.

Harry Griendling, managing partner of DoubleStar Inc., a West Chester recruitment company, has seen some limited improvement. After a bleak third quarter with no new business, his company signed contracts with four companies to recruit a total of 500 workers.

"We've seen an increase in market activity around hiring," he said.

In November, the services sector gained 58,000 jobs, the Labor Department report said. Among the other sectors, manufacturing and construction shed 68,000 positions. Education and health services added 40,000 jobs, and government employment rose 7,000.

Contact staff writer Jane M.

Von Bergen at 215-854-2769

or jvonbergen@phillynews.com.

This article contains information from the Associated Press.