U.S. employers unexpectedly cut 85,000 jobs in December, government data showed on Friday, cooling optimism on the labour market's recovery and keeping pressure on President Barack Obama. The Labour Department said November payrolls were revised to show the economy actually added 4,000 jobs rather than losing 11,000 as initially reported. With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over the two months. The unemployment rate was unchanged at 10 percent in December. Analysts polled by Reuters had expected nonfarm payrolls to be unchanged last month and the unemployment rate to edge up to 10.1 percent. "The American economy is clearly not going to burst out of the gate with growth and job creation but it will perform better than its major competitors in Europe and Japan," said Joseph Trevisani, chief market analyst at FX Solutions in Ridgewood, New Jersey. U.S. stock futures turned negative on the data, while government bond prices erased losses. The U.S. dollar fell against the euro. High unemployment is one of the toughest domestic challenges facing Obama. The administration's success in getting people back to work will shape prospects for Obama's political future.