The U.S. unemployment rate edged down to 10 per cent in November, even as the American economy shed 11,000 jobs during the month.

Erin McNiff waits to meet with a job counsellor at the California Employment Development Department office in Sacramento. The U.S. economy shed 11,000 more jobs in November. (Rich Pedroncelli/Associated Press)

The job losses, which were a fraction of the 130,000 that Wall Street economists had expected, came in the construction, manufacturing and information sectors, while temporary help services and health care added jobs.

In the three months before November, payroll job losses had averaged 135,000 a month, the Bureau of Labor Statistics reported Friday.

The unemployment rate is based on the number of people actively looking for work. The jobless rate is calculated from a survey of households, while the number of jobs lost or gained is calculated from a separate survey of business and government establishments. The two surveys can sometimes vary.

The rate also dropped because fewer people are looking for work. The size of the labour force, which includes the employed and those actively searching for jobs, fell by nearly 100,000, the third straight decline. That indicates more of the unemployed are giving up on looking for work.

The number of those officially unemployed edged down to 15.4 million. At the start of the U.S. slowdown in December 2007, the number of unemployed persons was 7.5 million, and the jobless rate was 4.9 per cent.

If part-time workers who want full-time jobs and laid-off workers who have given up looking for work are included, the so-called underemployment rate also fell, to 17.2 per cent from 17.5 per cent in October.

Average hourly earnings also edged up by one cent, or 0.1 per cent, to $18.74, the report said.

President Barack Obama visits the Allentown Metal Works factory in Allentown, Pa., on Friday, the same day data showed the U.S. economy shed 11,000 jobs in November. (Susan Walsh/Associated Press)

The bureau also revised upwards its payroll data from the previous two months. The change in total non-farm payroll employment for September was revised from –219,000 to –139,000, and the change for October was revised from –190,000 to –111,000.

"Talk about surprise," ScotiaMcLeod wealth adviser Andrew Pyle said. When the upward revisions are factored in, the report was effectively an increase of almost 150,000 for November, he noted. "This should give consumer confidence a real boost going into the final weeks of the holiday shopping season."

"We've still got a long way to go, but the good news in this report provides important positive momentum," said Carl Riccadonna, senior U.S. economist at Deutsche Bank.

U.S. President Barack Obama, speaking in Allentown, Pa., applauded the drop in job losses and put finishing touches on a proposal he'll unveil next week to try to stimulate business hiring.

He will endorse sending new money to state and local governments to stem their layoffs and expanding a program that gives people cash incentives to fix up homes with energy-saving materials, a senior administration official said.

Obama will also endorse new tax breaks for small businesses that hire workers, said the official, who spoke on condition of anonymity because the package, and Obama's speech, are still being crafted.

With files from The Associated Press