The US unemployment rate jumped to 9.7% in August as 216,000 jobs were lost, according to a report showing improving labour market conditions.
The jobless rate rose from 9.4% to the highest since June 1983, but the data did show an easing of the massive pace of job losses.
The US Labor Department report, seen as one of the best indicators of economic momentum, showed job losses narrowed considerably.
Revised rates showed 276,000 jobs lost in July and 463,000 in June, higher than previous estimates of 247,000 and 443,000 respectively.
Economists had forecast 230,000 job losses and an unemployment rate of 9.5% in August. The civilian labour force rose by 73,000 in August, suggesting more people are returning to the workforce to seek employment in anticipation of better conditions.
The US economy shrank at a 1% annual pace in the second quarter, reflecting an easing of the deep recession that led to a 6.4% pace of decline in the first quarter. Many economists expect the world's biggest economy to show growth in the current quarter although difficult job market conditions could hit consumer spending and dampen any recovery.
The Labor Department's August data showed a loss of 136,000 jobs in the goods-producing sectors including 63,000 in manufacturing and 65,000 in construction. The services sector shed 80,000 jobs including 10,000 in retail. The only segment showing growth was education and health care, with 52,000 jobs added.
