By Ian Swanson - 01/07/11 02:43 PM EST
The nation’s unemployment rate fell to 9.4 percent in December, hitting its lowest rate since May 2009.
The economy added only 103,000 jobs in December, fewer than forecast by private analysts, but the Department of Labor's revised statistics for the previous two months showed stronger growth.
In November, Labor revised figures to show the economy gained 71,000 jobs instead of the 39,000 first estimated. In October, the revised figures showed 210,000 jobs were created, more than the 172,000 first projected.
The sharp decline in the jobless rate will be welcome news to the White House and Republicans. Still, the creation of only 103,000 jobs for the month will be a disappointment. Private forecasters had expected to see as many as 170,000 jobs created.
Federal Reserve Chairman Ben Bernanke, testifying Friday to the Senate Budget Committee after the Labor report's release, said there is increasing evidence that a "self-sustaining recovery" has taken hold. Still, he said that conditions in the labor market have improved "modestly at best," and that despite some positive signs in the labor market, "considerable time will likely be required before the unemployment rate has returned to a more normal level."
House Majority Leader Eric Cantor (R-Va.) said the "slight drop" in the unemployment rate is encouraging, but that government must do more to help people get to work. "That will start by empowering employers across the country to grow," he said in a statement.
Cantor said the new Republican majority that took over the House on Wednesday would work on growing the economy by repealing the new healthcare law and cutting government spending. The House is expected to vote on healthcare repeal next week, but the legislation appears to have no chance of moving forward in the Senate.
President Obama is expected to make comments on the economy in Maryland on Friday as he announces that former Clinton administration official Gene Sperling will serve as director of the National Economic Council.
Labor said the number of unemployed people dropped by 556,000, to 14.5 million, in December. Since the beginning of 2010, that's a fall from 15.2 million unemployed people.
The unemployment report comes amid some signs that economic growth is accelerating. Several manufacturing surveys have reported strong growth in the last few weeks, and on Thursday the payroll-services giant ADP reported that private businesses added 297,000 jobs in December. ADP's numbers frequently differ from the monthly Labor report.
This story was posted at 8:38 a.m. and updated at 9:43 a.m.