U.S. economy sheds 85,000 jobs

FYI...the labour market is likely going to be the key to when interest rates can begin to rise...pretty sobering numbers below out of the US...Important to note the number of people who have given up looking for work, they're unemployed, but do not count in the official unemployment number...

U.S. economy sheds 85,000 jobs
Last Updated: Friday, January 8, 2010 | 10:34 AM ET
CBC News

Non-farm payroll employment in the United States decreased by 85,000 jobs in December, the Department of Labour said Friday.

Despite the jobs decreases, the unemployment rate held steady at 10 per cent.

Still, economists were surprised by the December slump in the U.S. jobs markets.

The decline "was an extremely softer report relative to market expectations going into the release," said Ian Pollick, an economics strategist with TD Securities in a commentary. He added that economists were "looking for a print of 0, while our own in-house forecast was looking for a positive print of 25K."

Analyst disappointment leaked into U.S. stocks as the Dow Jones, Nasdaq and Standard & Poor's indices all opened the trading day in negative territory.

"U.S. equities turned lower following payrolls which underwhelmed expectations by a large margin and quashed the anticipated significant positive print," said Action Economics, a U.S.-based economics research outfit.

The Nasdaq market was the only one of the three that made up its initial losses by 10:30 a.m.

Fewer jobs, fewer seekers
The civilian labour force participation rate fell to 64.6 per cent during the month.

A sharp drop in the labour force, a sign more of the jobless are giving up on their search for work, explains how the unemployment rate stayed steady despite the job losses. Once people stop looking for jobs, they are no longer counted among the officially unemployed.

Employment fell in construction, manufacturing and wholesale trade, while temporary help services and health care added jobs, the agency said.

At 15.3 million, the number of unemployed people was unchanged. At the start of the recession in December 2007, the number of unemployed persons was 7.7 million, and the unemployment rate was five per cent.

Among the unemployed, the number of long-term unemployed — those jobless for more than 26 weeks — continued to trend up, reaching 6.1 million.

Average hourly earnings rose by three cents, or 0.2 per cent, to $18.80 US.

The agency also revised its jobs data for November up from a loss of 11,000 jobs to a gain of 4,000 for the month.

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