The national unemployment rate dropped from 9.8% to 9.4% in December, its lowest level in nearly nine months. The Labor Department reported that the economy added 103,000 jobs, while the agency also revised estimates from the two earlier months, reporting that 210,000 jobs were created in October instead of 172,000, and 71,000 in November, instead of 39,000.

While the news may come as a welcome relief for the unemployed and beleaguered job seekers, the sudden drop in unemployment is far from a sure sign of a steady economic recovery:

Federal, state and local governments continued to shed jobs -- cutting another 10,000 last month after trimming 8,000 in November, revised from 11,000 mostly on the local level. States and municipalities dealing with tighter budgets may be faced with further cuts as they try to shrink their deficits. 

While the overall picture showed improving job growth, the additions in the private sector in December were not enough to significantly reduce the ranks of the unemployed or keep pace with people entering the work force. The outlook remains bleak for many workers. More than 14.5 million people were out of work in December. 

 Still, economists noted that the jobs data is a lagging indicator and pointed to other signs of a turnaround, though their outlook for 2011 remained varied. 

 "The U.S. economy finally appears to be picking up steam and headed toward recovery," said Steven Blitz, a senior economist for ITG Investment Research. "Several economic indicators -- including manufacturing and services output, and sales of cars and consumer goods -- have shown noticeable improvement over the last few months."

Read the full story at the New York Times.

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