Highlighted companies include Caterpillar (CAT), Costco (COST) and Church & Dwight (CHD).

The January employment numbers were ugly. The unemployment rate jumped to 7.6% as 598,000 jobs were shed.

The worst part is not that the unemployment rate is at it highest level since 1992 (the data was expected to be bad), but rather that it will get worse. The cumulative total of announced job cuts from the previous 14 days is likely well into the six figures. Even NASCAR is cutting staff.

What is surprising, however, is the pace at which the economy has contracted. During the first half of 2008, the unemployment rate averaged around 5%. A friend commented last night that what has hurt her family's business the most is not the recession, but rather the speed at which it has occurred. People who had been promised raises early last year are now just hoping to hold onto their jobs.

The impact is felt at companies across the board, whether it be Caterpillar (CAT) or Costco (COST). In what is a sign of the times, consumer staples company Church & Dwight (CHD) warned that it expects sales to decline for some of its product categories.

Though recessions are part of the normal economic cycle, it seems like the severity of the current recession could have been avoided if the housing bubble was not allowed to inflate so much. One has to wonder why a bunch of Ivy League-educated investment bankers weren't smart enough to plot salary data against home prices. Marketers don't think twice about looking at salary data, and if you're in the business of funding mortgages, well, you should know what houses cost.

Investors should not be concerned about blame, however, but rather be focused on rebuilding their portfolios. In an era of uncertainty, the best advice is to continue to seek out fundamentally sound companies trading at reasonable valuations with rising earnings estimates.

And don't get overly concerned about the day-to-day fluctuations in the S&P 500 (SPX). Volatile conditions will continue for the foreseeable future. While there are some who are trying to predict when a bottom will occur -- I have called for the Dow Jones Industrial Average ($DJI) to fall to 6,300 -- the reality is that nobody knows. Nonetheless, uncertainty and volatility create opportunity. Investors just need to be patient and selective.