Employers shed 85,000 jobs in December - worse than expected - as the economy continued to stumble on its way to recovery, the U.S. Labor Department reported today.

Even a significant increase of 46,500 in temporary staffing, long considered a leading indicator of eventual permanent hiring, couldn't offset widespread declines, in construction, manufacturing and, particularly, in construction, which lost 53,000 jobs - the most jobs of any sector.

There are now nearly 15.3 million unemployed people in the United States, up from 7.7 million at the start of the recession in December 2007.

The unemployment rate remained unchanged at 10 percent.

Adding in those who have been forced to work part time, or who want to work but are too discouraged to look, the unemployment rate stands at 17.3 percent.

The economy has lost more than 8 million jobs since the recession began in December 2007; 4.2 million of them were shed in 2009.

"The road to recovery is never straight," President Obama said today.

Obama announced the awarding of $2.3 billion in tax credits to companies that manufacture wind turbines, solar panels, cutting-edge batteries, and other green technologies. The money will come from last year's $787 billion stimulus program and will create 17,000 green jobs, he said.

"It is very frustrating," said Patrick Gillespie, business agent for the Philadelphia Building Trades Council, an umbrella group of construction unions.

"There are a number of very viable projects just hanging there simply because they can't get financing," he said.

Gillespie listed as an example stalled construction on a mixed retail, residential and office development at the former Worthington steel mill in Malvern. "That's hundreds of jobs," he said.

Gillespie said unemployment among local union construction ranks is now about 40 percent. Nationally, more than 2 million construction workers are unemployed.

The Dow and the rest of the major indexes took the news in stride, closing up for the week.

While December's payrolls are down, the Labor Department revised its November payroll statistic upward. For the first time in 22 months, the economy expanded enough to create jobs - 4,000 in the month of November.

"We are seeing people get jobs, but we also have people working two and sometimes three jobs to make ends meet," said Cheryl Spaulding, who heads Joseph's People, a support group for the unemployed that began at a Downingtown church but now meets in about 10 churches in the suburbs.

"We are still getting lots of new members, so while things may be better, we are a long way from a substantive change in job growth," she said. "We are trading high-paid jobs for growth in low-pay jobs in service industries.

"This is a serious problem for our economy," she said, "because when a high-paid person is laid off and takes a low-paid job, or even two or three of these jobs, they are cutting off high school graduates and people who need their first job.

"If we do not move their parents back into family-supporting income jobs, younger workers are going to continue to stay unemployed."

The unemployment rate for all 16- to 19-year-olds was 27.1 percent in December, and 48.4 percent for African Americans in that age group. The unemployment rate for workers age 20 to 24 years is 15.6 percent.

"The bad news is that a lot of companies have learned to do more with less," said Linda Hahn, executive director of the Metropolitan Career Center, a nonprofit agency in Philadelphia that has been placing some retrained workers in jobs.

"This [recession] has given businesses practice in how to have a computer answer your telephone or how to have one person doing two to three jobs and be grateful to be there."

Indeed, one impediment to hiring has been the rising productivity of workers, which grew at an annual rate of 8.1 percent in the third quarter, after increasing 6.9 percent in the second quarter.

At a certain point, and the question is when, employers will have to hire to alleviate heavy workloads, economists say.

Meanwhile, jobs are still being slashed. UPS, the world's largest package delivery company, said it will cut 1,800 management and administrative positions to streamline its U.S. package segment. UPS has 340,000 workers in the United States.

In December, cuts were made in manufacturing, trade, leisure and hospitality. Even retail lost 10,200 jobs in December, the year's busiest shopping season. Government employment fell by 21,000.

Financial services bumped up by 4,000 and education services added 35,000 jobs, although hospital employment declined by 2,700.

The biggest growth came in professional and business services, driven by temporary hiring.

Bill Yoh, chairman of the Yoh Group, the staffing division of Day & Zimmermann, an engineering firm in Philadelphia, said he found the news heartening.

"Just as government spending is driving the stimulus, it is also driving temporary hiring," said Yoh, who is also on the executive board of the American Staffing Association, a trade group.

He said that aerospace and defense contractors are more comfortable about hiring now that they have a better understanding of Obama's attitude. The White House has "allayed concerns that he was going to pull the plug on everything."

Clearly, hope matters.

Tomorrow, for example, My Career Transitions, a support group for the unemployed that meets at Villanova University, will feature the success stories of several people who have found jobs.

The group draws more than 100 for its monthly meetings.

"We are hearing of more success stories and more opportunities," said Bart Ruff, the group's leader. "We are hearing that some companies that had freezes are now at least interviewing people. There is a definite improvement in the outlook."

Looking to make the best of a bad situation is Andrej Bula, 35, who lost his contract recruiting job at Tyco Electronics Ltd. in Berwyn in October 2008.

Last month, Bula launched an online company, hiremetee.com, which sells T-shirts, sweatshirts and hoodies imprinted with slogans such as "Hire Me. Seeking Job in Finance," or, in Bula's case, "Hire Me. Seeking Job in Human Resources."

Bula, who now lives with his parents in Columbus, Burlington County, describes his product as instant networking.

"Wear it anywhere: at the mall, at the hairdresser's," he said. When he models the shirts, he gets more questions about the shirt than job leads, but that's fine with him. "I'm completely dedicated to the launch of my business."