Associated Press
WASHINGTON -- Brace for a year of stubbornly high unemployment.
Gripped by uncertainty over the economic recovery, employers chopped 85,000 jobs last month, and difficulty finding work helped chase more than half a million people out of the job market.
The unemployment rate held steady at 10 percent. It did not creep higher only because so many people stopped looking for work and are technically not counted as unemployed.
But the jobless rate is likely to rise in coming months as more people see signs of an improving economy and start looking for work again. Some economists think it could near 11 percent, which would be the highest since World War II, by June.
The Labor Department's monthly jobs report suggested employers will remain wary about hiring and skeptical of the economy recovery. Just Friday, UPS said it would cut nearly 2,000 white-collar jobs.
"It is a wait-and-see attitude," said Stuart Hoffman, chief economist at PNC Financial Services Group.
The economy is growing, but too weakly to persuade employers to ramp up hiring. Growth has to be robust to drive down the jobless rate, especially as more people start looking for work.
Complicating the recovery are remnants of the recession: high debt, a sputtering housing market and the inability or reluctance of people and businesses to borrow and spend. Most economists think unemployment will rise this year and stay high into 2012.
That poses a threat to President Barack Obama and Democrats in the fall congressional elections and escalated pressure on the administration to boost job creation. The "road to recovery is never straight," Obama said after Friday's report.
Analysts had expected the economy to lose just 8,000 jobs in December. The loss of 85,000 was a setback after November, when, according to revised figures released Friday, the economy actually added 4,000 jobs, the first gains in nearly two years.
"The labor market is getting better, but it is still a long way from being healthy again," said Paul Ashworth, economist at Capital Economics Ltd.
Stephen Jankiewicz, who was filling out an online r
