The U.S. jobless rate dropped to 9.7 percent in the first month of the new year, providing Americans with some good news that the economic recovery may be taking hold. But, overall another 20,000 jobs were lost, which was disappointing as President Barack Obama and majority Democrats begin a push for new legislation to stimulate job growth.
The three tenths dip below 10 percent is a psychological boost for Americans, the president and majority Democrats as they focus legislative efforts on creating jobs, and try to attract some support from opposition Republicans to economic policies.
In reporting the 9.7 percent figure, the lowest since last August, the Bureau of Labor Statistics said that, based on a survey of American households, the number of employed rose by 541,000, though overall employers shed another 20,000 additional jobs.
But at a hearing of the bipartisan Joint Economic Committee in Washington, Bureau commissioner Keith Hall also noted a continuing upward trend in the number of people seeking but unable to find work.
"Both the number of unemployed persons and the unemployment rate declined in January, however the share of those jobless for 27 weeks and over continued to rise," said Keith Hall.
Democrat Carolyn Maloney said the figures showed that President Obama's efforts to reverse the recession are succeeding.
"It appears that we are trending in the right direction," said Carolyn Maloney. "We no longer are facing an avalanche of job losses."
Republicans pounced on recently revised government figures showing one million more jobs lost than previously estimated since the U.S. recession began in December 2007, a total of 8.4 million.
House of Representatives Republican leader John Boehner assailed what he called the president's "job-killing policies" which he asserted are expanding government and debt.
President Obama and Democrats have said job figures would have been far worse without the economic stimulus the Democratic-controlled Congress passed last year.
Addressing the Democratic National Committee winter meeting in Washington, House Speaker Nancy Pelosi referred to a slightly higher figure reported recently of 22,000 non-farm private sector jobs lost, and compared it to a 741,000 figure of a year ago.
"We know we have to do better, but it is a big difference," said Nancy Pelosi. "It is 720,000 jobs fewer than January of last year."
Among a series of steps to boost job growth, the president has proposed using $30 billion from loans the government made to financial institutions to help stimulate bank lending to small businesses.
Next week, the Senate will take an $80-billion jobs bill, which includes tax cuts as incentives for Republicans, who although they remain in the minority now have enough seats to block major legislation.
Senator Richard Durbin appealed to Republicans to work with Democrats.
"This is a good faith offer on the Democratic side," said Richard Durbin. "We are inviting our friends on the Republican side to join us. Bring your best ideas forward. Let's put these on the floor and move on them with a sense of urgency."
But Republican Senator John McCain, who lost the 2008 presidential election to President Obama, challenged the president's job creation proposals and what McCain called out-of-control spending.
"The president says he is going to have a spending freeze next year and in the very next breath proposes a $100 billion in new spending called a jobs bill, not a stimulus bill, but a jobs bill," said John McCain. "It is out of control."
President Obama is scheduled to meet next week with House and Senate Democrats and Republicans as part of his efforts to encourage bipartisan cooperation.
White House press secretary Robert Gibbs called the drop in overall unemployment reported on Friday encouraging, but added continuing job losses were discouraging, underlining the need to advance the president's tax cut and loan incentive goals to stimulate small business hiring.