Unemployment rate edges downward to 9.7 percent, but economy sheds jobs

The job losses reported by the Bureau of Labor Statistics were slightly worse than expected by some analysts, who had predicted the economy could see thousands of jobs created.

Adjustments over the last year that were first reported by Labor on Friday also show that job losses over the course of the recession were much worse than previously estimated. Christine Romer, chairwoman of the Council of Economic Advisers, said job losses during the recession were 1 million more than previously estimated.

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The report also showed that more workers are giving up the search for a new jobs. The number of discouraged workers not looking for work because they believe no jobs are available grew to 1.1 million from 734,000.

The Senate plans to take up an $80 billion jobs bill as early as Monday. Majority Leader Harry Reid (D-Nev.) hopes to have that legislation approved by the end of the week, before Congress adjourns for a one-week recess.

Democrats are including a package of tax cuts in the jobs bill to convince Republicans to support it. Sen. Scott Brown (R-Mass.) was sworn in on Thursday, depriving Democrats of a filibuster-proof majority in the Senate.

That means at least one Republican will have to support the jobs bill for it to pass in the Senate. Only three Senate Republicans supported last year's $787 billion stimulus, and one of them later switched parties.

Republican National Committee Chairman Michael Steele pounced on Friday's figures as more evidence the stimulus failed. In a release, he highlighted the 2.8 million jobs the economy has lost since the stimulus became law.

Administration officials and congressional Democrats have repeatedly said there would have been even more job losses without the stimulus, and Speaker Nancy Pelosi (D-Calif.) on Friday said the stimulus was a big part of the welcome news in the new report.

“We know we have to do better but it’s a big difference,” Pelosi said in an address to the Democratic National Committee winter meeting. “Our recovery act was an important part in making that change."

The core of the new tax proposal would include a tax credit for employers who hire new workers in 2010 and a package of tax extenders, such as the research and development tax credit.

The House approved a larger jobs bill before Christmas, and Obama has called on the Senate to complete a jobs package.

Democrats are hoping for a turnaround in the jobs market as soon as possible, given the midterm elections in November. Dozens of House and Senate Democrats face difficult elections in the fall.



The Labor report on Friday adjusted numbers for the previous two months. It said the economy had created 64,000 jobs in November, a big jump from the 4,000 previously estimated.


But the economy lost 150,000 jobs in December, almost twice the 85,000 that Labor originally estimated had been shed. The unemployment rate was 10 percent in December and November.

There were signs of recovery in the numbers.

Recent economic data has shown a surge in manufacturing, though that sector gained only 11,000 jobs in January.

The numbers were also boosted by the federal government, which hired 33,000 workers, including 9,000 temporary Census Department workers.

Construction cut 75,000 jobs, while transportation and warehouse employment fell by 19,000.

On Thursday, Labor reported that for the first time since the second quarter of 2007, the number of hours worked grew by 1 percent in the fourth quarter of 2009. Longer hours are generally a precursor to businesses hiring new workers.

Labor productivity also increased at a 6.2 percent rate, which could be difficult to sustain and could lead businesses to hire workers.