Employers slash jobs in Dec, pressuring Obama

The jobless rate held steady at 10 percent, the Labor Department said on Friday, but it would have marched higher if a surprisingly large number of discouraged jobseekers had not left the labor force.

November payrolls were revised to show the economy actually added 4,000 jobs rather than losing 11,000, as initially reported, breaking a streak of 22 consecutive monthly losses. With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over those two months.

Unemployment remains the Achilles heel of the economy's recovery from its worst recession in 70 years, with job creation critical to sustaining the recovery when government stimulus fades.

"The jobs numbers ... are a reminder that the road to recovery is never straight. What this underscores, though, is that we have to continue to explore every avenue to accelerate the return to hiring," Obama said, announcing new investments in clean energy.

Economists had expected a flat reading for payrolls, with the unemployment rate ticking up to 10.1 percent.

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Two Fed officials said on Friday they would like to see the nation's jobs picture improve before the U.S. central bank withdraws extraordinary support for the economy and markets.

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Citing the continued gains in temporary help, seen as a precursor to permanent hiring, analysts argued the data suggested a broad trend toward a labor market recovery was intact.

The cold weather might have partially contributed to the surprise drop in payrolls, some said. Construction employment fell last month, with manufacturing seeing a drop as well.

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Obama's popularity has steadily fallen, knocking his approval ratings down to around 50 percent. This could dim the election prospects for his Democratic Party in the November congressional elections.

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Professional and business services added 50,000 positions, while education and health services increased payrolls by 35,000. Temporary help employment rose 47,000, continuing an upward trend that shows a reluctance among employers to hire full-time workers but suggests they may need to soon.

The average workweek was unchanged at 33.2 hours, while average hourly earnings edged up three cents to $18.80.