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Jobs Drop by 95,000 in September, Unemployment Rate Unchanged

In the government's last monthly economic report before voters head to the polls, the Department of Labor on Friday reported a 95,000 fewer jobs in September, and an unchanged unemployment rate of 9.6 percent. 

Private companies added 64,000 new jobs in September but 159,000 government layoffs meant a net loss of U.S. jobs. It was the fourth straight month of net losses attributed to declining government payrolls and little hiring in the private sector. 

A total of 77,000 temporary jobs for the decennial census were terminated last month, according to the Labor Department's monthly report released Friday. On top of that local governments cut 76,000 jobs in September, mostly in the education sector. State government job losses made up the rest.

The jobless rate has now topped 9.5 percent for 14 straight months, the longest stretch since the 1930s. 

With the Nov. 2 vote looking more and more to become a referendum on the Obama administration's economic policies, the September jobless numbers don't bode well for Democrats who touted the $814 billion stimulus plan and other government-inspired initiatives to get the economy rolling.

Speaking at a brick-making company, President Obama said the public-sector layoffs would have been worse had it not been for federal aid to the states. He added that Republicans don't make sense in their opposition to federal aid because more "weakness in public sector employment is a drag on the private sector as well."

He also touted the Small Business Jobs Act, which he singed into law last month. 

"Within the 11 days since it took effect, more than 2,000 small-business owners have already received more than a billion dollars worth of new loans, with more to come," Obama said. 

"Just imagine the difference it could have made for small businesses in our economy had it happened months before," he added, focusing on Republican opposition to the new law.

Obama's chief economic adviser Austan Goolsbee also said that the administration remains focused on encouraging robust growth. 

"Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report," he wrote on a White House blog.

Goolsbee told Fox Business Network that the administration had a much tougher slog to pull the country out of recession.

"You've got to start at the bottom and work your way out," he said. "In this case, the recession the president comes into office in the middle of, is worse than the 1980s recession, the 1990s recession, and the 2000s recession combined."

But Republican National Committee Chairman Michael Steele issued a statement saying the unemployment rate should allow voters to issue a "final verdict" on the administration's economic policies. 

"President Obama and his left wing allies on Capitol Hill have spent trillions of taxpayer dollars with nothing to show for it but a mountain of crippling debt and chronic joblessness," Steele said. "After nearly two years of weak leadership and broken promises, the American people will go to the polls in less than a month and reject this Administration’s economic mismanagement."

House Minority Leader John Boehner, R-Ohio, added that the report demonstrates the need to enact the Republican "Pledge to America," which aims to restore jobs and cut spending. 

"Republicans' blueprint for job creation starts with stopping all of the looming tax hikes and ending Washington's out-of-control spending spree. Make no mistake, our economy will ultimately recover, but it will do so because of the hard work and entrepreneurship of the American people, not more of the same wasteful Washington spending and job-killing tax hikes and mandates," Boehner said in a statement.

Nearly 14.8 million people were unemployed last month. That's almost 100,000 fewer than in August.

Analysts had predicted about 75,000 private sector jobs and a slight uptick in the unemployment rate.

Gallup issued a survey on Thursday that found unemployment, not seasonally  adjusted, actually rose to about 10.1 percent in September, marked by a steep rise in the second half of the month that would likely not be measured in the government's unemployment report on Friday.

Gallup noted that part-time employment was down and underemployment remains persistent.

Weak job growth will likely force the Federal Reserve to take additional steps to boost the economy next month by buying government debt to try to lower interest rates and spur more borrowing. The Fed has already bought $1.7 trillion worth of mortgage-related and government bonds. That plan, however, could be hindered by calls for freezes on foreclosures that have sent the mortgage market spiraling.

While the Congressional Budget Office announced Thursday that the fiscal year 2010 deficit was $125 billion less than it had projected, at $1.3 trillion, and the National Bureau of Economic Research announced the recession had ended in June 2009, revised data released Friday also showed a troubling trend.

Payrolls in July and August was revised lower by 15,000. Overall, employment in the 12 months to March had been overstated by 366,000.

Hourly wages and hours worked remained unchanged.

Since the recession ended in June 2009, the economy has grown 3 percent, according to economists at Deutsche Bank. That's less than half the average 6.5 percent pace in postwar recoveries.