Unemployment Falls to 9.7%

The nation's unemployment rate fell unexpectedly to 9.7% in January, the Labor Department said today. The drop from 10% comes even as US employers cut another 20,000 jobs. The rate dropped because a survey of households found the number of employed Americans rose by 541,000. Overall, however, the total number of people who have lost jobs during the recession is now estimated to be 8.4 million.

Many economists say businesses are reluctant to add workers because it's not clear whether the recovery will continue once government stimulus measures, such as tax credits for home buyers, end. "Until some of these uncertainties from Washington get cleared up, businesses, particularly small businesses, are going to be loath to do any additional hiring," said the chief investment officer at Haverford Investments. (More Department of Labor stories.)