Although the markets kicked off the new decade (or the last year of the old decade, if you’re a purist) with a bang, this isn’t going to be the year of the raging bull. Earnings likely will be tepid relative to earlier in the decade, as consumers simply lack the wherewithal, or the credit, to spend as freely as they once did.

But employment, the key piece of the recovery puzzle, is steadily improving. Although the heavier-than-expected job losses in December 2009 weighed on market sentiment, this disappointment belied marked improvement. Even with 85,000 jobs lost in the month, fourth-quarter cuts still averaged just 69,000 a month, compared to more than 600,000 a month in the first quarter of the year.

In fact, most of December’s job losses came from exactly where one would expect–construction, manufacturing and wholesale trade. But temporary staffing agencies continued to hire, adding 47,000 jobs in the month, and younger workers are finding their way into the workforce. The number of temporary workers is worth noting because the ranks usually swell before companies add permanent positions.

The employment number that bearish commentators discount the most is the revised November 2009 reading, which indicated that 4,000 jobs were created that month. Although this data will be subject to yet another revision, if it holds it would be the first month of net job creation in almost two years. At the same time even if 300,000 net new jobs were created each month, it would still take six years to create enough positions for all jobseekers.

In short, the economic recovery is gaining steam, but 2010 won’t be a banner year for corporate earnings. Nevertheless, investors should stretch their wings a bit and take on measured risks–just bear in mind that selectivity and a focus on quality companies remain the keys to success, no matter how hot or cold market sentiment runs. Smart investors follow reasonable investment strategies regardless of short-term moves in the indexes.

And in this month’s pages you’ll find a number of opportunities for the new normal, including a mid-cap fuel distributor poised to snap up some of its competition; a highly diversified international oil and gas exploration and production outfit that also holds a power generation portfolio; a value-sensitive mutual fund with broad international exposure; an exchange-traded fund that allows individual investors to profit from a new type of municipal bond; and a few growth plays in the wireless arena. Finally, our subject for The Rukeyser Interview makes the case that tighter carbon regulation is a foregone conclusion in the US, regardless of what happens on the international stage.