The unemployment rate dropped unexpectedly in January to 9.7 percent, according to a report that offered hope the economy will add jobs soon.
The unemployment rate dropped from 10 percent because a survey of households found the number of employed Americans rose by 541,000, the Labor Department said Friday. The job losses are calculated from a separate survey of employers.
Excluding the beleagured construction industry, which shed 75,000 jobs, the private sector added 63,000 positions.
The unemployment rate fell to its lowest level since August. John Silvia, chief economist at Wells Fargo, said the decline wasn't a result of a shrinking labor force, which has held the rate down in previous months.
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"It simply was, people found jobs," he said. The report is "consistent with continued improvement in the labor market."
The department also revised its past employment estimates to show that job losses from the Great Recession have been much worse than previously stated. The economy has shed 8.4 million jobs since the downturn began in December 2007, up from a previous figure of 7.2 million.
That's the most jobs lost in any recession, as a percent of total employment, since World War II.
The figure for November was revised higher, however, to show a gain of 64,000 jobs. That was initially reported as a gain of 4,000.
Much of January's report offers hope that employers are starting to reverse course and may start adding jobs soon. Aside from November's gain, January's job losses were the smallest since the recession began and are down from the huge loss of 779,000 jobs in January 2009.
The manufacturing sector added jobs for the first time since January 2007. Its gain of 11,000 jobs was the most since April 2006.
Retailers added 42,100 jobs, the most since November 2007, before the recession began. Temporary help services gained 52,000 jobs, its fourth month of gains. That could signal future hiring, as employers usually hire temp workers before permanent ones.