WASHINGTON (Reuters) - U.S. employers cut a deeper-than-expected 263,000 jobs in September, fuelling fears the weak labour market could impede the economy's recovery from its worst recession in 70 years.
The 21st straight monthly decline in non-farm payrolls helped to lift the unemployment rate to a 26-year high of 9.8 percent from 9.7 percent in August, according to a Labour Department report.
While the contraction in employment was worse than the 180,000 drop economists surveyed by Reuters had predicted, many believed it did not signal the start of a reversal in the trend towards stabilization of the labour market.
Some analysts even suggested September's reading might have been distorted by a sharp drop in government employment.
"I don't think it argues against a modest recovery in the U.S. economy ... but this is why we are not in a rapid V-shaped recovery. September was the payback month," Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh.
U.S. stocks opened lower on the data, but clawed back most of the losses on buying in technology and financial shares. Shares slipped this week as other data pointed to a levelling-off in the nascent U.S. recovery from a recession that began in December 2007.
U.S. Treasury prices rallied initially but then gave up those gains. Bond market investors are wary after a recent rally in U.S. government debt -- considered a safe investment weak economic times -- that has brought the benchmark 10-year note to its lowest yield since May.
The 21st straight monthly decline in non-farm payrolls helped to lift the unemployment rate to a 26-year high of 9.8 percent from 9.7 percent in August, according to a Labour Department report.
While the contraction in employment was worse than the 180,000 drop economists surveyed by Reuters had predicted, many believed it did not signal the start of a reversal in the trend towards stabilization of the labour market.
Some analysts even suggested September's reading might have been distorted by a sharp drop in government employment.
"I don't think it argues against a modest recovery in the U.S. economy ... but this is why we are not in a rapid V-shaped recovery. September was the payback month," Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh.
U.S. stocks opened lower on the data, but clawed back most of the losses on buying in technology and financial shares. Shares slipped this week as other data pointed to a levelling-off in the nascent U.S. recovery from a recession that began in December 2007.
U.S. Treasury prices rallied initially but then gave up those gains. Bond market investors are wary after a recent rally in U.S. government debt -- considered a safe investment weak economic times -- that has brought the benchmark 10-year note to its lowest yield since May.
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