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Source: Reuters
The US unemployment rate surprisingly fell to a five-month low in January and factory payrolls grew for the first time since 2007, hinting at a labour market recovery even though the economy lost 20,000 jobs.
The White House has cautiously welcomed the figures but says more needs to be done to put people back to work.
President Barack Obama says they show that the United States is climbing out of the "huge hole" created by the recession but has cautioned that they are not cause for celebration.
Obama has called the data encouraging, while cautioning that jobs figures would fluctuate for months to come.
The decline in payrolls reported by the Labor Department on Friday was far smaller than the 150,000 drop posted in December.
November's data from the survey of employers was revised sharply higher to a gain of 64,000, up from 4,000.
The jobless rate, based on a separate household survey, fell to 9.7% from 10% in December.
That survey found employment rising, with the size of the labour force roughly flat.
Analysts had expected payrolls to rise by 5,000 and the unemployment rate to edge up to 10.1%.
"The wheels of the economy are turning. The improvement in the employment data does match the increase in GDP the last two quarters so it's not a fluke. The economic recovery looks much more sustainable today," says Chris Rupkey, senior financial economist at Bank of Tokyo/Mitsubishi UFJ in New York, referring to Gross Domestic Product, a measure of the economy.
Details of the report were relatively upbeat.
The length of the average workweek hit its highest in a year and overtime in manufacturing was the most since September 2008, suggesting growing pressure to add to payrolls.
Some analysts, however, are sceptical of the drop in the jobless rate and believe it will head higher again.
Annual revisions to the payrolls data showed job losses since the recession began were much deeper than originally thought.
The economy has lost 8.4 million jobs since the start of the recession in December 2007.
Before the revisions, the figure was 7.2 million.
In January, the number of 'discouraged job seekers' stood at 1.1 million, up from 734,000 a year ago.
Job politics
With Americans increasingly anxious about persistent high unemployment, Obama has declared that job creation will be his top priority in 2010.
He has announced proposals to expand credit for small businesses with the aim of spurring job growth.
"These numbers, while positive, are a cause for hope but not celebration," Obama says.
Financial markets have grown nervous about the prospect of unemployment in the US remaining high for a long time.
The economy resumed growth in the second half of 2009, but a labour market recovery has yet to materialize.
