Everyone's cheering today the strong payroll report released by the Labor Department, but if you take a closer look at the numbers you'll understand why so many middle class folks do not think the labor market offers them any good news. While the government reported that unemployment held steady at 4.7% and 166,000 jobs were created, you must look at where those jobs were created and where jobs were lost to get the true picture.

Job growth was created in the service sector, which added 190,000 jobs - led by food services (37,000 jobs - primarily at restaurants), employment services (34,000 jobs) and health care (34,000 jobs). Job losses were seen in the higher paying manufacturing sector where 21,000 jobs were lost in October and 203,000 jobs have been lost in the last year. Employment at banks and mortgage brokers dropped 5,000 where 56,000 people lost jobs since February and more layoffs are expected as the mortgage mess continues to grow.

Richard Moody, Chief Economist for Mission Residential, also found that 21,500 jobs were lost in retail trade during October, which he said is the third consecutive monthly decline. In his October NonFarm Report, he wrote, this "is a sign that retailers are not expecting great things in the coming months."

Earnings also were flat. Just a 0.2 cent gain in average hourly wage to $17.58 an hour with no gain in the average workweek of 33.8 hours.

If you're in the top executive ranks you're pay may look good, but for the middle class these numbers don't show much hope of earning a better paycheck.

Lita Epstein has written more than 20 books including the Complete Idiot's Guide to Improving Your Credit Score due out in December.

Warren Buffett has said that you should never ask a barber if you need a haircut. But if a barber tells you that you don't need a haircut, that probably means you really don't need one.

And while most people would agree that top executives at publicly traded companies are overpaid, we now have all the evidence we need to end this debate: They think they're overpaid too! A survey of 70 presidents and chief executives conducted by the National Association of Corporate Directors found that 2 out of 3 top executives thought chiefs were given high compensation relative to their performance. Only 2.2% thought the pay was too low!

It's time for corporate directors to be taken out to the woodshed. They have failed mightily in their duty to shareholders. They're supposed to be representing our interests, but instead serve as lapdogs, paying CEOs amounts of money that they themselves consider obscene!

Some have attempted to frame this as a populist issue, pointing to the fact that the gap between the rich and poor has reached its widest point in 60 years. But I'm more concerned about it as a corporate governance issue. Directors are pretty obviously wasting shareholders' resources on excessive compensation, and it needs to stop.

Nonfarm employment increased by 167,000 in December,while the unemployment rate remained unchanged at 4.5 percent,according to Bureau of Labor Statistics. Average weekly wages rose 0.5 percent to $577.66. Hourly earnings for the year were up 4.5 percent.

Jobs grew the most in eight months, according to Bloomberg News, adding that this shows that the economy is weathering the slump in housing and manufacturing. The increase was higher than the 100,000-job median estimate of 70 analysts surveyed by Bloomberg. Economists surveyed by Dow Jones expected a 115,000-job increase and for hourly earnings to rise 0.3 percent. The yield on the benchmark 10-year Treasury note jumped 7 basis points to 4.67 percent following the report, Bloomberg said.

In its story, Reuters said, "some parts of the report may be troubling to Federal Reserve policy-makers who have expressed concern about potential inflation." The increase in average hourly earnings was the highest since April, Reuters said.

If jobs are healthy and wages are going up, why are consumers so worried? Many retailers reported disappointing holiday sales. Housing prices, with the exception of places like New York City, are soft.

Consumer Confidence numbers were the second piece of major economic data released today. The first was the Payroll numbers released at 8:30 AM and discussed in my earlier post.

This was literally a Tale of Two Views. The Payroll numbers came in better than expected, showing unexpected strength in the economy. However, Consumer Confidence data showed a dip from 92.4 in November to 86.9. Neither report indicated an extreme in a single direction.

What does this mean? It looks more like the soft landing that the Fed has been forecasting. I discussed this in detail in my prior post The U.S. Stock Market: Five Reasons 2007 is Looking Like 1995. The stock market is literally climbing the Wall of Worry.

This is great news for long-term investors and vindicates the bullishness that I have had since last summer. It allows the Fed to maintain its current position of neither raising nor lowering interest rates. The stock market continues to rises slowly.

However, it is driving the pundits and traders insane! They have been forecasting that Fed will have to adjust its position to reflect their own. The inflation hawks say that this means higher rates. The recession doves say that the current weakness in the economy will force the Fed to lower rates. The Fed seems to be winning the battle.

Remember not to fight the Fed. As I have said before, the Fed can maintain its position longer than you can remain solvent! The best and easiest way to make money in the market is to Follow the Fed.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.