UNEMPLOYMENT UP TO 9.8%

WASHINGTON—The U.S. economy added fewer jobs than expected in November and the unemployment rate rose to its highest level since April, indicating the economic recovery remains weak 17 months after the recession ended.

Nonfarm payrolls rose by 39,000 last month as private-sector employers added only 50,000 jobs, the Labor Department said Friday. Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 144,000 and that the jobless rate would remain unchanged at 9.6%.

The unemployment rate, which is obtained from a separate household survey, unexpectedly rose to 9.8% last month. More than 15 million people seeking work can't get a job.

The October payrolls number was revised up slightly to show a 172,000 increase from a previous estimate of 151,000.

The weaker-than-expected data caused the dollar to weaken against the yen and euro and other major currencies. Treasurys rallied on the report.

The U.S. unemployment rate has now been above 9% since May 2009, or 19 months. That matches the longest stretch at such an elevated level since World War II. In the deep recession of the early 1980s, the jobless rate crept to 9% in March 1982 and remained above that mark until September 1983.

Federal Reserve officials believe the jobless rate could still be around 9% a year from now.

In the private sector, accounting for about 70% of the work force, employers added 50,000 jobs in November after adding 160,000 in October.

The November breakdown showed temporary-help services and health care continued to add jobs, while employment fell in retail. The manufacturing sector, which had been the big creator of jobs at the start of the recovery, shed 13,000 jobs, the fourth decline in a row.

Total government employment, meantime, fell by 11,000, hurt by losses in municipal jobs. Local governments have been grappling with tight budgets.

Fed Chairman Ben Bernanke told a panel of business executives this week that job creation is still the most significant problem the economy faces.

The poor job growth, together with low inflation, led the Fed to take the controversial decision to buy $600 billion in U.S. Treasury notes through June in an effort to spur growth. The central bank has already bought $1.75 trillion in government and mortgage bonds to fight the financial crisis, and some senior politicians worry the Fed won't be able to control inflation once economic growth accelerates.

The report showed 41.9% of unemployed Americans, or 6.3 million people, were out of work for more than six months in November. The longer someone is without a job, the harder it is to find work.

President Barack Obama's administration this week warned the expiration of long-term jobless benefits could hit consumer spending in the holiday season, weakening the economy further and ultimately costing more jobs. The law that temporarily extended unemployment benefits to as long as 99 weeks expired this week after Democratic and Republican senators blocked rival attempts to renew it. That means that extended jobless benefits affecting about two million people are set to expire by the end of the year.

A broader measure of the unemployment rate, which includes people who stopped looking for work and those settling for part-time jobs, remained high at 17% in November, the same as the previous month.

Meanwhile, the average workweek for all employees was 34.3 hours in November, the same as in October. Employers normally increase the hours for their existing work force before hiring new people.

Average hourly earnings of all employees increased by just one cent to $22.75. Higher income helps support consumer spending. Accounting for about 70% of demand in the U.S. economy, household consumption remains weak compared with previous recoveries.