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Friday 7 January 2011

US unemployment rate drops in December

A government-run employment centre, in Las Vegas, Nevada Stubbornly high unemployment has hindered the US economic recovery

The US unemployment rate dropped to 9.4% in December from 9.8% in November, the biggest one-month drop since April 1998, official figures show.

Some 103,000 jobs were created last month, the Labor Department said, although this was fewer than the 145,000-175,000 that had been forecast.

The lower jobless rate was because more people found jobs, but also because some had given up on their searches.

If people stop looking for work, they are no longer counted as unemployed.

Overall employment for October and November was revised to show 70,000 more job gains than earlier reported.

Stubbornly high unemployment has hindered the US economic recovery.

Headline miss

The unemployment rate is now at its lowest since May 2009.

Private hiring increased in December by 113,000, while government employment fell by 10,000.

Employment rose by 47,000 in the leisure and hospitality sector and by 36,000 in healthcare, but was little changed in other major industries, the Labor Department said in its monthly report.

In volatile trading, the euro rose into positive territory against the dollar after the report but then relinquished those gains.

"The headline miss [on jobs created] is pretty bad, but the drop in the unemployment rate is the one reason why the dollar has not collapsed completely," said Brian Dolan, chief strategist from Forex.com.

"Overall, a very disappointing number that reinforces the idea that we're in for a long, slow jobless recovery."

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