In a mixed report Friday, the government said the unemployment rate held steady at 5.4 percent in September, but businesses added only 96,000 jobs — far fewer than the 148,000 expected.

The Labor Department (search) also revised down its estimate of new jobs in August to 128,000 from 144,000 that was reported last month.

Labor said that, according to preliminary estimates, the economy added about 236,000 more jobs than previously thought in the year ended March 2004, and it will incorporate the change into benchmark revisions issued in February.

After including the projected change, it appears that about 585,000 jobs have been lost since President Bush took office in January 2001.

Republicans and Democrats closely scrutinized the report ahead of Friday night's presidential debate. Bush says the economy is growing steadily and notes that jobs are being created. Kerry says sluggish job creation can't keep pace with population growth.

The report said the four hurricanes that battered the Southeast in September had minimal impact on the jobs sector, though Labor contended it held down growth in affected regions. The storms affected companies and workers unable to operate in the aftermath, but other employers added jobs to respond to the devastation, the department said.

The Bureau of Labor Statistics commissioner, Kathleen Utgoff, said "we do not believe the net result of...(the hurricanes) materially changes the national employment situation, but we cannot precisely quantify the weather effects."

Much of the growth last month occurred in government hiring, which resulted in 37,000 net new jobs. Hiring in the service sector continued to rise in such industries as professional and business services, which added 34,000 jobs overall; financial services, which added 26,000 jobs; and the leisure and hospitality category, which expanded hiring by 13,000.

Manufacturers shed 18,000 jobs after increasing hiring in the previous two months. Retail and information services sectors also lost jobs. However, the nation's factories have boosted hiring by 88,000 jobs in the previous seven months. Construction employment grew by 4,000. The sector has showed little growth since May. 1

Analysts described the jobs number as weak.

"It is a disappointing number, it suggests the economy is still not growing particularly quickly," said economist David Sloan of 4Cast Ltd. in New York. The U.S. Federal Reserve (search) has raised short-term interest rates three times this year — from 46-year lows in June — to 1.75 percent and analysts said the jobs report left room to keep raising them but not by much.

"For the Fed, I think our view has been for a while that the next move will be the last one and that the fed funds rate stays at 2 percent until the end of 2005," predicted Jason Daw, a foreign exchange strategist at Merrill Lynch in New York.

Labor Secretary Elaine Chao, in a statement, said the economy "has been through a great deal lately — devastating hurricanes and rising oil prices." The new figures show "the strength and resilience of our economy and that the labor market continues to improve," she said.

Reuters and The Associated Press contributed to this report.