The US unemployment rate edged up last month to a nine-year high as the economy lost more jobs, according to an official report released yesterday.

The Labour Department said the unemployment rate rose in May to 6.1 per cent - its highest level since July 1994 - but much of that increase reflected the entry of new job-seekers, more hopeful of future openings.

And the 17,000 drop in payrolls outside the agricultural sector was less than many analysts had expected, though it was unclear how much significant technical changes to the payroll part of the report affected the results.

Together the results suggest the US remains mired in a jobless recovery - with businesses still highly reluctant to expand operations in the aftermath of the Iraq war. But the technical changes showed job losses this year were not as severe as first reported. Job losses from January to April were 114,000 after the changes - little more than a third of what was previously reported.

The report showed heavy losses in the manufacturing sector, but there were positive signs: wage growth picked up, and temporary-help jobs grew along with manufacturing overtime. - (Financial Times Service)