Unemployment rose to 9.8 percent in November, from 9.6 percent in October. Economists polled by Reuters were expecting the rate to remain constant at 9.6 percent for the fourth month, with nonfarm payrolls up 140,000 during November.
Expectations had gotten high after the ADP National Employment Report on Wednesday stated that the private sector added about 93,000 jobs in November.
But nonfarm payroll employment remained unchanged, adding only 39,000 jobs during the month.
The truth is that the economy is going nowhere at a time when companies are not willing to boost hiring, Paul Dales, an economist at Capital Economics, said in a note.
Temporary help services and health care continued to add jobs during the month but retail industry saw a decline in jobs, the report said.
However, Dales attributed this to companies' unwillingness to commit to full-time workers rather than a sign that more permanent hiring is on the way.
Employment in manufacturing, which generally sees the first decline and the last rise, has remained flat since May.
Job creation is an important part for economic recovery in the U.S. The U.S. Federal Reserve announced a second round of quantitative easing in early November, hoping to spur job growth. The QE2, as it is popularly known, is expected to help reduce unemployment rate by half a percentage point by 2012.
However, most economists state that about 200,000 jobs need to be created every month for the unemployment rate to drop.
Overall, today's data strongly support our long-held view that the unemployment rate will remain at 9.5 percent or above for at least the next two years and that GDP will not grow by much more than 2 percent, Dales said.