US payrolls unexpectedly fell by 101,000 in December and the unemployment rate stayed at 6 percent, capping the first back-to-back years of job losses since the Eisenhower administration in the 1950s.
The decline in jobs last month was the most since February and followed a revised 88,000 drop in November, the Labor Department said. That was twice the number originally reported, and the back-to-back declines were the first in eight months.
"It's a jobless and joyless recovery," said Stuart Hoffman, chief economist at PNC Financial Group in Pittsburgh.
President George W. Bush this week proposed a US$670 billion plan to end taxes on stock dividends and accelerate income tax cuts, saying it would help create 2.1 million jobs. The economy has lost 1.6 million jobs in the past two years, the first consecutive drop since 1957 and 1958.
Federal Reserve Governor Edward Gramlich suggested the central bank may lower its benchmark US overnight bank lending rate, already the lowest in four decades at 1.25 percent, to stimulate the economy if hiring doesn't pick up.
"Our mandate is for stable, maximum employment. We take it seriously," he said in a speech in New York to the Directors Roundtable. "If unemployment doesn't drop as the recovery proceeds, we will notice that."
Economists had expected payrolls to rise by 20,000 after a decline of 40,000 previously reported for November, based on the median of 55 forecasts in a Bloomberg News survey. The jobless rate was expected to remain unchanged.
The 1.6 million job losses in the first two years of Bush's presidency compares with same-period gains of 6.7 million for Bill Clinton and 2.3 million for George H.W. Bush.
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