WASHINGTON – The U.S. economy unexpectedly lost 85,000 jobs in December, dashing hopes that the tide has turned on the employment front, the U.S. Labor Department said Friday.
The unemployment rate remained at 10 percent, unchanged from November and down from 10.1 percent in October. The steady unemployment rate despite job losses means more workers have given up looking for a job and thus been dropped from the government’s count.
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The number of jobs lost last month was significantly higher than had been expected. Among 76 economists surveyed by Bloomberg, the median projection was that payrolls were unchanged in December. They also predicted the jobless rate would stay at 10 percent.
“The recession may be technically over, but companies are still exhibiting caution when it comes to making permanent additions to staff,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, told Bloomberg News before the report. “This recovery is showing all the signs of being the third jobless recovery in a row.”
In one of the report’s few hopeful signs, the Labor Department revised its November estimate of payrolls from a loss of 11,000 jobs to a gain of 4,000 jobs – the first increase since December 2007. And employment at temp agencies, a leading indicator for permanent jobs, increased by 46,500.
The department also said the number of jobs lost in October was 127,000, higher than the original estimate of 111,000. Monthly job losses peaked a year ago this month at 741,000.
With December’s figure included, the U.S. unemployment rate averaged 9.3 percent in 2009, up from 5.8 percent in 2008, the biggest annual increase since records began in 1940.
The nation’s employers have shed at least 7.3 million jobs since employment began to fall in January 2008, the biggest of any downturn since World War II in percentage terms. Annual revisions to the data the Labor Department will make next month likely will push the figure above 8 million.
Rhode Island’s unemployment rate declined for the second consecutive month to 12.7 percent in November, the most recent month for which figures are available, according to the R.I. Department of Labor and Training. The only state with higher joblessness was Michigan.
