December jobs report: Unemployment falls to 9.4%
January 7, 2011

NEW YORK (CNNMoney) -- The U.S. economy added 103,000 jobs in December, and the unemployment rate unexpectedly fell to 9.4% -- its lowest level since May 2009, the Labor Department reported Friday.

Businesses were hiring, adding 113,000 jobs to payrolls in the month. But the government continued to shed staff, cutting 10,000 workers from payrolls.

But the two previous months were better than originally thought. November was revised up to 71,000, while October was revised to 210,000, adding a combined 70,000 jobs to the 2010 total.

Economists surveyed by CNNMoney had forecast 150,000 jobs added during December, and 100,000 for November's revision.

Many economists boosted their predictions earlier in the week, after private payroll processor ADP released a shockingly strong report Wednesday, showing private employers added 297,000 jobs to their payrolls. That report is often seen as a bellwether for the government report that follows.

While the latest data brings hope for 2011, economists still caution that job gains will be gradual at best. There's still a long way to go to recover the 8.5 million jobs lost since the Great Recession began.

The labor market typically needs at least 300,000 to make a difference in the unemployment rate, economists say. Anything less than that is just barely enough to keep pace with population growth.

Overall, the economy rounded out 2010 with 1.1 million jobs added, the best one-year gain in hiring since 2007.