US adds less jobs in a sluggish economy

WASHINGTON - A sluggish US economy added just 39,000 jobs in November while the unemployment rate rose to 9.8 percent, tempering hopes of a quick recovery from its worse slowdown in decades.

The numbers marked a major slowdown from October, when US employers added an upwardly revised 172,000 jobs, the Labour Department job report released Friday said.

CNNMoney.com said November’s numbers fell short of the 150,000 gain that economists surveyed by it were expecting.

Private businesses continued to hire for the eleventh month in a row, following nearly two straight years of private sector losses during the Great Recession. Companies added 50,000 jobs to their payrolls in October, also falling short of the 175,000 jobs economists had predicted for the sector.

Meanwhile, the government shed 11,000 jobs during the month. On the upside, revisions for September and October showed there were 38,000 additional job gains in those months than previously reported.

The unemployment rate, which is calculated in a separate survey, unexpectedly ticked up to 9.8 percent after holding at 9.6 percent from the prior three months, the government said.

DPA adds: Kathy Bostjancic, director for Macroeconomic Analysis of the New York-based Conference Board, suggested retailers may have held their own hiring low after high discounts to lure people back into the shops cut profits.

The weak November report “shows we’ve returned to anaemic employment growth after October’s bump,” Bostjancic said in a statement. “We don’t see any signs that this holiday season will jump-start 2011 employment.”

The rising unemployment is also a major blow to US President Barack Obama, who has said in recent weeks that the recovery in the world’s largest economy was beginning to gather steam.

Austin Goolsbee, chair of the White House Council of Economic Advisers, pointed out that 50,000 private-sector jobs were added in November, the 11th straight month that companies have hired.

“Although the overall trajectory of the economy has improved dramatically over the past year, there will surely continue to be bumps in the road ahead such as this,” Goolsbee said.

Republicans are likely to use the poor labour report to push harder for an extension of all tax cuts adopted under former president George W. Bush as a means of keeping the economy going.

The tax cuts are due to expire at the end of this year. Obama and his fellow Democrats have pushed for an extension of middle-class tax cuts but sharply resisted extending the cuts for wealthy income earners.

The poor jobs report will also give ammunition to Democrats who have been pushing for an extension of unemployment benefits for millions of out-of-work Americans.

The report is also likely to offer further justification for the US Federal Reserve’s controversial move to buy up $600 billion in Treasury securities over the coming months.

The central bank’s move was sharply criticized by some foreign governments for pushing down the value of the dollar, but Fed Chairman Ben Bernanke has insisted the move is necessary, as the recovery remains weaker than hoped.