Sep 02, 2011 NEW YORK (Dow Jones)--Copper futures fell for a second day Friday as an unexpected slump in U.S. monthly employment data undermined investor tolerance for risk.

Copper for December delivery, the most actively traded contract, settled 3.60 cents, or 0.9%, lower at $4.1245 a pound on the Comex division of the New York Mercantile Exchange. The contract had touched a five-day low at $4.0900.

The front-month contract, for September delivery, fell 3.55 cents, or 0.9%, to settle at $4.1070 a pound after touching a low of $4.0725.

U.S. nonfarm payrolls were flat last month as the government sector shed jobs while private businesses added only 17,000 new positions. The unemployment rate was unchanged at 9.1%.

Commodities and equities retreated after the downbeat data as fears about U.S. growth eroded investor demand for what are widely considered risky assets.

Copper futures are highly sensitive to economic data as the red metal is used in everything from iPods and cars to household plumbing, and demand for such goods wanes when the economy falters.

"I think you're going to see copper go sideways for the foreseeable future until people see how the economy is going to pan out," said Matt Zeman, head of trading at Kingsview Financial.

The weaker data are also clouding the long-term outlook for copper demand and eroding the chance that copper will set fresh records this year.

"While we are still very positive on copper fundamentals, we do not expect prices to recover strongly and to markedly outperform until short-term macro worries and concerns about Chinese demand dissipate," said analysts at Barclays Capital.

The world's largest copper mine, Chile's Escondida, lifted the force majeure on its copper concentrate shipments Friday. The mine, controlled and operated by BHP Billiton Ltd. (BHP, BHP.AU), had invoked the contract clause that allowed it to suspend delivery due to circumstances outside of its control on July 27 due to a union workers' strike.

Escondida produces copper concentrates, an intermediate product that needs further refining to become pure copper. The mine last year produced 1.086 million metric tons of copper.

Copper settlements (ranges include electronic and pit trading):
Sep $4.1070; down 3.55 cents; Range $4.0725-$4.1400
Dec $4.1245; down 3.60 cents; Range $4.0900-$4.1615