Washington, Jan 9 - The US unemployment rate was unchanged at 10 percent in December, but another 85,000 jobs were lost on the month, the Labour Department reported Friday in a blow to the country's hopes of a quick recovery from recession.

But in a revision of its earlier numbers, the department said the economy actually gained 4,000 jobs in November, marking the first monthly increase since the US recession began in December 2007.

US stocks fell at the start of trading Friday as most economists had expected fewer job losses in December. But the major indices in New York recovered and were up slightly by the afternoon.

President Barack Obama, facing pressure to speed up the recovery, acknowledged December's report marked a step backward in the effort to revive job growth in the US. But he said the trend was

still "in the right direction".

The 10-percent unemployment rate remains the highest in more than a quarter century. The rate did not climb in December because more than 600,000 people declared they were no longer looking for unemployment.

"Unfortunately, the hoped-for positive job growth has not yet materialised and we are still seeing modest job losses," said Heidi Shierholz of the Economic Policy Institute. She warned that "upward pressure" on the unemployment rate will continue as the recovery gathers steam and more people re-enter the labour force.

The world's largest economy lost more than four million jobs over the course of 2009, which began with the US in the depths of its worst recession in seven decades.

The unemployment rate stood at five percent when the recession began more than two years ago. Economists believe the US pulled out of recession some time over the summer months, but most expect the jobless rate will remain at 9-10 percent over the coming year.

"We have to continue to explore every avenue to accelerate the return to hiring," Obama said in a brief speech from the White House.

Obama announced a new $2.3-billion tax credit for clean energy manufacturers, which he said would create 17,000 new jobs, using money from the $787-billion stimulus package approved in February 2009.

Construction and manufacturing sectors continue to be hit hardest by the sluggish economy, the Labour Department said, while health care gained jobs in December.

The economy also added 47,000 temporary workers in December, the fifth straight monthly gain, fuelling hope that a broader recovery is on the way.

October's numbers were also revised by the department to 127,000 jobs lost, up from 111,000. (dpa)