WASHINGTON -- As the prospect of double-digit unemployment looms, President Barack Obama on Monday sought to set expectations for the U.S., saying job losses will likely roll on ``for weeks and months to come'' because hiring always lags behind in an economic rebound.

``We just are not where we need to be yet,'' Obama said as he met with a panel of economic advisors. ``We've got a long way to go.''

Unemployment hit a 26-year high of 9.8 percent in September. The next monthly reports come out Friday and could show it topping 10 percent.

Still, the economy is growing again. Reports out Monday show improvement in manufacturing, construction and contracts to buy homes.

The Institute for Supply Management's gauge of manufacturing activity grew in October at the fastest pace in more than three years. It was driven by businesses' replenishing of stockpiles, higher demand for American exports and support from the government's $787 billion stimulus program.

The ISM index shot up to 55.7 in October, the third straight reading above 50, which signals growth in the sector. It was the highest level since April 2006.

``It clearly looks like we are seeing a turnaround in the manufacturing sector,'' said David Wyss, chief economist at Standard & Poor's in New York.

Economists cautioned that the manufacturing pattern seen in the past two post-recession recoveries likely will be repeated this time: In each case, early strength in manufacturing, led by companies' restocking of inventories, faded within a few months.

Wyss agrees that the ISM index could dip below 50 in the first quarter of next year.

But Wyss thinks that would indicate a temporary slump and not a sign that the economy was dipping back toward recession.

Another government report issued Monday showed that construction spending rose a bigger-than-expected a 0.8 percent in September, fueled by the strongest jump in home construction in six years.

In a third report, the National Association of Realtors said the volume of signed contracts to buy previously occupied homes rose 6.1 percent in September to a reading of 110.1. That's the highest level since December 2006. And it's more than 21 percent above a year ago.

Stocks jumped early Monday after the strong reports on manufacturing and housing but by the afternoon were fluctuating.

The Dow Jones Industrial Average ended up 77 points but was still well off its best level of the day.

The worry is that the pace of recovery the market has been counting on may be hard to maintain.

The president, who spoke as he met with the nation's Economic Recovery Advisory Board, said that building a sustainable economy and getting people back to work remain his ``administration's overriding focus.''