The US economy continues to shed jobs even as its recovery has gathered strength, according to figures released yesterday.

Official data showed a fall of 93,000 in payroll employment in August, the seventh successive decrease. Economists and Bush Administration officials had expected a small rise. Long-term interest rates and the dollar fell after the figures were released.

The data underline how the US recovery is marked by a productivity-driven rise in output that is inducing little response from a becalmed labour market.

Officials put a brave face on the figures, noting that the unemployment rate - which is calculated from a separate survey of households - fell from 6.2 to 6.1 per cent. There was a rise in employment in the household survey, which includes the self-employed and has a wider coverage of small businesses.

But the payroll figures are generally considered a better guide to short-term movements in the labour market. - (Financial Times Service)