Unemployment falls in US and Canada, eurozone woes continue

US employment appears to be stabilising. From Bloomberg:

The unemployment rate in the U.S. unexpectedly dropped to 9.7 percent in January, indicating the labor market may be poised to climb out of its deepest slump since World War II.

More than half a million Americans found work, a Labor Department report showed today in Washington, helping push the jobless rate to the lowest since August. A separate survey of employers showed payrolls declined by 20,000 as construction companies and state and local governments cut back...

The survey of households showed employment increased by 541,000 workers last month and the number of people in the labor force rose. The gain brought the participation rate, or the share of the population in the workforce, up to 64.7 percent from 64.6 percent.

Meanwhile, Canadian employment rebounded in January. Bloomberg reports:

Canada gained almost three times as many jobs as expected in January, led by part-time positions for youth, pushing the unemployment rate down to the lowest since September.

Employment rose by 43,000 last month, Statistics Canada said today in Ottawa, and the unemployment rate fell to 8.3 percent. The median forecast of 22 economists surveyed by Bloomberg was for a 15,000 gain in employment and a jobless rate of 8.5 percent.

Europe, however, continued to be a source of bad news as the week drew to a close.

Bloomberg reports that German industrial production unexpectedly declined in December.

German industrial production unexpectedly declined in December, suggesting the recovery in Europe’s largest economy has slowed.

Output fell 2.6 percent from November, when it increased 0.7 percent, the Economy Ministry in Berlin said today. Economists forecast a 0.6 percent gain for December, the median of 32 estimates in a Bloomberg News survey showed. From a year earlier, production declined 7.1 percent when adjusted for the number of work days.

But the big issue in Europe remains that of sovereign debt. From Reuters:

European policymakers scrambled on Friday to reassure markets about the stability of the 16-nation currency bloc as investors shed euro assets for a second day and Portugal backed a law that may push its swollen deficit higher...

Greek Prime Minister George Papandreou, on a visit to India, promised to "credibly apply" an austerity program designed to bring his country's yawning debt and deficit under control.

But worries about Portugal mounted after its opposition-led parliament defied the Socialist government and approved a bill on regional finances that could complicate the country's budget consolidation drive.