Unemployment Falls to 9%

The unemployment rate dropped sharply last month to 9%, the lowest level in nearly two years. But the economy added only 36,000 new jobs, the fewest in four months. The unemployment rate has fallen by eight-tenths of a percentage point in the past two months; that's the steepest two-month drop in nearly 53 years. But part of that drop has occurred as many of those out of work gave up on their job searches—when unemployed people stop looking for jobs, the government no longer counts them as unemployed.

In one bright spot, manufacturing added 49,000 jobs, the most since August 1998. And retailers added 28,000 jobs, the largest number in a year. In the past three months, the economy generated an average of 83,000 net jobs per month—not enough to keep up with population growth. The number of people unemployed fell to 13.9 million in January, about double the total that were out of work before the recession began in December 2007. (More unemployment stories.)