Unemployment rate falls to 9.7 percent

The department said construction, transportation and warehousing lost jobs, but retail and temporary jobs rose leaving non-farm employment "essentially unchanged," with a loss of only 20,000 jobs in the month.

Economists predicted the jobless rate would hold at 10 percent.

The Labor Department said the number of workers who cannot find jobs after 27 weeks of looking "continued to trend up" in the month, putting discouraged workers at 6.3 million, a gain of 5 million since December 2007 at the start of the recession.

During the month, construction lost 75,000 jobs, transportation and warehousing 19,000. Manufacturing added 11,000 positions, while jobs in the automotive industry swung higher, up by 23,000.

Retail businesses added 42,000 jobs in the month.

The average workweek rose by 0.1 hour to 33.9 hours. Hourly earnings in January rose by 0.2 percent or four cents per hour.

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