Job creation picked up in September but not enough to stop the unemployment rate from rising to 4.7 percent, the highest in just over a year.

The new job market snapshot released by the Labor Department on Friday showed that employers boosted payrolls by 110,000, the most in one month since last May. In an encouraging note, the economy actually added 89,000 jobs in August. That marked an improvement from the net loss of 4,000 that the government first estimated.

The bump up in the unemployment rate from 4.6 percent in August came as hundreds of thousands of people streamed back into the labor market. That new rate of 4.7 percent was the highest since the summer of 2006.

Wages, meanwhile, rose solidly.

Altogether, the report suggests that although the job market has softened, it hasn't been hit nearly as hard by a credit crunch and a housing slump as thought was the case just a month ago.

To be sure, the ill effects of these problems are showing up at some companies. Construction firms cut 14,000 jobs in September, Factories slashed 18,000. Retailers got rid of just over 5,000 jobs. Financial services companies eliminated 14,000 slots.

However, gains in education and health services, professional services, leisure and hospitality, and in government work more than offset those losses, leading to a net gain in new jobs in September.

The tally of new jobs was better than the 100,000 positions that economists were forecasting would be added to payrolls. They did correctly predict that the jobless rate would rise to 4.7 percent.

Still, the worst housing slump in 16 years and a jarring credit crunch have intensified uncertainty about the economy's outlook as well as companies' own financial positions.

To cushion the economy and bolster confidence, Federal Reserve Chairman Ben Bernanke and his colleagues last month sliced a key interest rate by one-half percentage point to 4.75 percent. It was the first rate cut in more than four years.

Policymakers hope the rate reduction will make businesses and people more inclined to spend and invest, which would help energize overall economic activity.