Reuters
Fri Sep 4, 2009 5:11pm BST

U.S. job losses were the smallest in a year last month but the unemployment rate unexpectedly jumped to a 26-year high, according to data on Friday that showed the labour market limping towards health.

The Labour Department said the jobless rate climbed to 9.7 percent in August, the highest since June 1983. The increase suggests consumer spending will remain weak and impede the economy's recovery from the worst recession in seven decades.

Employers cut 216,000 jobs, the smallest since August 2008, but payroll losses in June and July were 49,000 more than initially estimated, the department said.

"The continued moderation in the pace of job losses offers some encouragement on the state of the U.S. labour market," said Millan Mulraine, economics strategist at TD Securities in Toronto.

Analysts had expected non-farm employers to cut 225,000 workers from their payrolls in August and had looked for the unemployment rate to rise to 9.5 percent after dipping to 9.4 percent in July.

Market reaction to the mixed data was modestly positive. U.S. stocks edged higher, while U.S. government bond prices fell on the hint of steady economic improvement.

"The trajectory is in the right direction," Obama economic adviser Christina Romer told CNBC television.

Stubbornly high unemployment is wearing on consumer confidence and crimping spending, pointing to an anaemic recovery from the recession that started in December 2007.
















Other key points:

A gauge of labour market slack that measures both the officially unemployed and discouraged jobseekers rose to a record 16.8 percent in August from 16.3 percent in July.

Since the start of the recession in December 2007, the economy has shed 6.9 million jobs.

The average workweek, which closely correlates with overall output and gives clues on when firms will start hiring, was unchanged at 33.1 hours in August.Average hourly earnings rose to $18.65 in August from $18.59 in July. It was the fourth straight monthly gain, reflecting an increase in the legal minimum wage.

"It certainly sustains perceptions that the economy gradually is swinging to recovery. The main pitfall would be continued weak income growth but that was not the case in August, so that's encouraging," said Pierre Ellis, senior economist at Decision Economics in New York.

Full article: http://uk.reuters.com/article/idUKTRE58333820090904?pageNumber=1&virtualBrandChannel=0

Fluff.....

Although signs of short term stabilization are in, the bleak facts remain high unemployment = high Government expenditure, rise in taxes and public sector cuts.

So yes we rally for in the stock market today, but DEPT is the long term driver and trust me this is going into a depression....!

When the UK Government plans public sector jobs cut and 1 in 10 NHS to be culled you know thing are starting to bite......... strikes are on the way!!