LONDON, Jan 9 - European shares extended their losses on Friday afternoon after surprisingly weak growth in U.S. payrolls last month raised doubts about the ability of the economic recovery to create new jobs. The number of workers on U.S. payrolls outside the farm sector in December rose by just 1,000. Economists polled by forecast that non-farm payrolls grew by 130,000. However, the unemployment rate fell to 5.7 percent, the lowest level in over a year. Economists had expected unemployment to remain unchanged at 5.9 percent. "It was a bad set of numbers because we need to see employment to keep this recovery going," Matthew Wickens, economist at ABN AMRO said. "Evidence from other surveys suggest the trend in the labour market is good, so maybe it's a blip," Wickens said. By 1340 GMT, the FTSE Eurotop 300 index <.FTEU3>, which rose to fresh 16-month highs this week, was down 0.6 percent at 970 points after being little changed ahead of the data.
The weak figures also weighed on the dollar, sending it to a new record low against the euro . U.S. stock index futures skidded after the data, signalling a weaker opening was in store for Wall Street. Investors want reassurance the U.S. economic recovery has been creating new jobs so that consumers keep spending. Meanwhile, among the market standouts, Royal Dutch/Shell Group , the world's second-largest oil group, fell 7.2 percent after saying it would recategorise 20 percent of its proven oil and gas reserves. Shell said the move would have no effect on its results, but analysts said valuations and ratings on the stock would fall. The DJ Euro Stoxx 50 index <.STOXX50E> fell 0.7 percent to 2,800 points.//