US jobless figures show triumph for private sector

More than 50,000 jobs were lost in the US last month - around half the amount feared as private companies hired new staff.

Official figures published in Washington this afternoon showed so-called non-farm payrolls fell 54,000 in August. That was far less than the 100,000 expected by economists in Wall Street, although it was still enough to push the unemployment rate up to 9.6%.

It is 7.8% in the UK.

Private employment in the US, seen by many as a better gauge of the jobs market and the economy, increased by an impressive 67,000, much more than the 40,000 expected. Government employment fell by 121,000, largely because 114,000 temporary workers who had been taken on to compile the US census finished their work in August.

The private sector figures raised hopes that the US economy, the biggest in the world, is not heading for a double-dip recession.

"An increase in private payrolls is a move in the right direction," said Ken Mayland, president of ClearView Economics in Ohio. "It's a stunted recovery and we see a lot of headwinds."

The better-than-feared jobs news was also a boost for Barack Obama ahead of the midterm elections.

More than eight million jobs were lost in the US during the recession - the worst employment slump in the post war era. "We really need private businesses to step up and begin to hire more aggressively for this recovery to gain momentum," said Ryan Sweet of Moody's.