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Payrolls fall by 85,000 as jobless rate stays at 10%

January 08, 2010 | “MarketWatch"

WASHINGTON (MarketWatch) -- U.S. job losses resumed in December after revisions showed payrolls rose in November for the first time in nearly two years, the Labor Department estimated Friday.

Nonfarm payrolls fell by a seasonally adjusted 85,000 in December following a revised 4,000 gain in November. During 2009, payrolls fell by 4.2 million.

The official unemployment rate remained at 10% in December.

Details of the report were generally weak, with few signs of further improvement in labor conditions. One bright spot: temporary-help jobs rose by 46,500, a leading indicator of permanent employment.

However, fewer industries were hiring in December than in October, and the number of discouraged workers rose by 287,000 to 929,000. The employment-participation rate fell to 64.6% from 64.9% as the labor force fell by 661,000.

Total hours worked in the economy were unchanged. The average workweek was unchanged at 33.2 hours.

An alternative gauge of unemployment, which includes discouraged workers and those forced to work part-time, rose to 17.3% from 17.2%.

The report was generally weaker than expected by economists surveyed by MarketWatch, who were looking for 15,000 more jobs and an increase in the unemployment rate to 10.1%.

Average hourly earnings rose 3 cents or 0.2%, to $18.80. Average hourly earnings are up 2.2% in the past year, similar to the rise in consumer price inflation.

More details

Since the recession began two years ago, payrolls have fallen by 7.3 million. Next month, the government will incorporate annual benchmark revisions that will likely push the total jobs lost to more than 8 million.

In its survey of 400,000 business establishments, the government found that employment fell by a seasonally adjusted 85,000 to 130.9 million in December. Government employment fell by 21,000, the majority at the post office and in local government.

Employment in the goods-producing sector fell by 81,000, including 53,000 in construction and 27,000 in manufacturing. The average workweek in manufacturing was unchanged at 40.4 hours. Of 83 manufacturing industries, 39.8% were hiring, the highest since May 2008.

Service-producing jobs fell by 4,000, including 10,000 in retail. Services had added 62,000 jobs in November. Temp-help jobs increased by 46,500, the fifth increase in a row. Health care added 25,000 jobs. Finance added 4,000 jobs. Professional and business services added 50,000 jobs. Leisure and hospitality industries cut 25,000 jobs.

Of 271 industries, 40% were hiring in December, down from 42.4% in November.

Payroll revisions were minor, with total payrolls revised down by 1,000 for October and November. October's loss was revised to 127,000 from 111,000, while November's loss of 11,000 was revised to a gain of 4,000.

A separate survey of households showed employment fell by a seasonally adjusted 589,000 in December and unemployment fell by 73,000 to 15.3 million. About 661,000 people dropped out of the workforce, driving the employment participation rate down to 64.6%. The employment-population ratio dropped to 58.2%.

Due to changes in seasonal adjustment factors for the household survey, the peak unemployment rate in October of 10.2% was revised to 10.1%, still a 26-year high.

The number of people who've been unemployed for longer than six months rose by 229,000 to 6.13 million, representing a record 39.8% of 15.3 million who are classified as unemployed.

By Rex Nutting, MarketWatch

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