US economy lost 95,000 jobs in September

A wave of government layoffs in September outpaced weak hiring in the private sector, pushing down the nation's payrolls by a net total of 95,000 jobs.

The unemployment rate held at 9.6 per cent last month, the Labor Department said Friday. The jobless rate has now topped 9.5 per cent for 14 straight months, the longest stretch since the 1930s.

The report is the final one before the November elections, which means members of Congress will face voters next month with an economy that is still struggling to create jobs.

The private sector added 64,000 positions, the weakest showing since June.

A net total of 159,000 government jobs were lost in September. Local governments cut 76,000 jobs last month, most of them teachers. That's the largest cut by local governments in 28 years. About 77,000 temporary federal census jobs ended and state governments shed 7,000 jobs.

The cuts reflect the toll the recession is taking on state and local government budgets. Falling home values are just beginning to push down local governments' property tax revenues. Most state and local governments are required to balance their budgets, which means drops in revenue are forcing cuts in services.

Nearly 14.8 million people were unemployed last month. That's almost 100,000 fewer than in August.