Unemployment Rate Falls to 9.7% in January

The U.S. unemployment rate dropped to 9.7% in January, the lowest level since August, from 10% in December, the Labor Department said Friday.

Employers trimmed payrolls by 20,000 jobs. Revisions showed that payrolls declined by 150,000 in December and gained 64,000 in November, Labor said.

Economists had forecast the jobless rate to stay at 10%, Bloomberg reported. Payrolls were forecast to increase by 15,000.

Factory payrolls grew by 11,000 jobs, the biggest gain since April 2006, following a 23,000 drop in December.

Payrolls at builders dropped 75,000 last month after a 32,000 drop the month before. Service industries gained 40,000 workers after losing 96,000.