Unemployment Rate Drops to 9.7%, but 2009 Was Worse Than Reported

BY Tom LeGro  February 5, 2010 at 9:53 AM EST

Employers cut 20,000 jobs in January, but the unemployment rate surprisingly fell to a five-month low of 9.7 percent, according to the Labor Department’s monthly report on Friday. The jobless rate was 10 percent in November and December.

The report also included revisions to 2009 figures, showing a much bleaker picture than had been previously thought. The economy has shed 8.4 million jobs since the downturn began in December 2007, up from a previous figure of 7.2 million.

There were 930,000 fewer jobs last March than previously stated. April through October saw another 433,000 job losses. And December was much worse than previously stated: The economy lost 150,000 jobs rather than the 85,000 originally reported.

In all, 9.3 million Americans remained without work in January, the Labor Department said.

Friday’s report showed that employment fell in construction, transportation, and warehousing, while temporary help services and retail trade added jobs. The “underemployment” rate, which includes part-time workers looking for full-time work, fell to 16.5 percent from 17.3 percent.

“It simply was, people found jobs,” John Silvia, chief economist at Wells Fargo, tells the Associated Press. The report is “consistent with continued improvement in the labor market.”

Nigel Gault, economist for IHS Global Insight, tells the New York Times, “We are turning the corner, but the gains will probably not be big enough to make serious inroads into the unemployment rate for some time.”

You can track the monthly unemployment rate and change in payrolls at NPR. And we’ll have much more on the unemployment rate and the economy on Friday’s PBS NewsHour.