Jobless rate holds steady at 9.7 percent

The sluggish economy lost 36,000 jobs in February while the nation's unemployment rate held at 9.7 percent for the month, the Labor Department reported on Friday.

The monthly report said severe winter storms last month may have affected payroll employment and hours worked, but that it is difficult to quantify the weather's impact.

Economic forecasters predicted February’s numbers would be dismal because of three winter storms that wreaked havoc on the East Coast last month, and Obama administration officials sought at the beginning of the week to downplay expectations.

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While the labor market remains "severely stressed," the February report is consistent with "gradual labor market healing" that has been seen over the past few months, Christina Romer, the chairwoman of Obama's Council of Economic Advisers, said in a Friday statement.

Romer also said the impact of the weather was "likely substantially negative."

Earlier this week, Larry Summers, the president’s chief economic adviser, told CNBC the blizzard would “distort” the monthly statistics and that it would be important to look at underlying trends in the economy.

Goldman Sachs had predicted that as many as 100,000 jobs could be lost in February because of the weather. The National Oceanic and Atmospheric Administration ranked two of the three storms among the 25 highest-impact Northeastern snowstorms of the last half-century.

The average workweek for all employees declined in February by 0.1 hours, according to the report. That statistic could have been affected by employees who could not get to work because of storms or who saw their businesses close because of the weather.

Since companies generally add hours for existing workers before hiring new workers, economists are looking for gains in the average workweek to signal additional hiring by businesses in the future.

Construction, a sector that could be affected by the bad weather, shed jobs, while hiring in manufacturing was steady.

In a note about the impact of the weather, the Labor report said workers would have to be off for an entire pay period not to be included in the report. It also noted that cleanup and repair activities dealing with the storms and their aftermath might have led to additional workers or more hours by existing workers.

Temporary agencies continued to add workers in February. That's seen as a positive sign for the labor market, since the hiring of temporary workers can be a precursor to companies hiring permanent workers.

The report comes a day after the House approved a $15 billion measure that would give tax breaks to companies that hire workers. The Senate, which previously passed a similar measure, will now consider the House bill.

President Barack Obama has said jobs will be his administration’s No. 1 focus in 2010, even as Democrats continue their long effort to overhaul the U.S. healthcare system. 

Republicans used the report to reiterate their attacks against Obama's healthcare push.

"Mother Nature is a force to be reckoned with, but it’s the blizzard of higher taxes, wasteful spending, and reckless borrowing coming out of Washington that’s destroying jobs in this country," House GOP Leader John Boehner (Ohio) said in a statement.

In January, unemployment dropped from 10 to 9.7 percent. The February report revised estimates on job losses in January to 26,000, up from the 20,000 initially reported. It also issued revised numbers for December, reporting that 109,000 jobs were lost that month instead of the 150,000 initially reported.


This story was updated at 9:05 a.m.