US economy adds more jobs than forecast in September

President Barack Obama is struggling to get a massive jobs package through Congress

The US economy added 103,000 jobs in September, ahead of many economists' expectations.

But the jobless rate was stuck at 9.1%, according to latest data from the Department of Labor.

Although the figures were boosted by the return to work of striking workers, the department also revised upwards employment data from August and July.

Last month, President Barack Obama unveiled a $450bn (£282bn) package of spending plans aimed at creating jobs.

The White House said that despite the new jobs, the unemployment rate remained "unacceptably high".

"Clearly, we need faster economic growth to put Americans back to work. Today's report underscores the president's call for Congress to pass the American Jobs Act to put more money in the pockets of working and middle class families," it said in its regular blog.

The private sector accounted for all the job gains, and the figures were boosted by the return of 45,000 Verizon telecoms workers who had been on strike in August.

Excluding those workers, the number of jobs created was still at a higher-than-predicted 58,000.

The aggregate weekly hours being worked also rose, the Labor Department said.

While the jobs report was better than feared, Tom Porcelli, chief US economist at RBC Capital Markets, said it did not suggest the economy was gaining momentum

"It moves you away from the ledge," he said.

The report gave a lift to Wall Street, with the three main share indexes rising in early trading. However, a downgrade of Spanish and Italian government debt by ratings agency Fitch undermined investor confidence, and the main Dow Jones index closed down 20 points at 11,103.

Improved picture

The US government shed 34,000 jobs in September, and there were large redundancies in local government of teachers and other school employees.

Job gains were seen in construction, retail, temporary help services and health care. There was a fall in the number of jobs in manufacturing for the second straight month.

Previously, data for August had showed the economy added no new jobs, underlying fears that the US was heading back towards recession.

But the revised August figures show a gain of 57,000 jobs. July was revised up to a gain of 127,000 jobs, from 85,000.

Mr Obama's jobs programme proposes funding huge construction projects, schools and services, while giving tax cuts to workers and small businesses to boost recruitment.

However, with Republicans having rejected a proposed tax rise on wealthier people to pay for it, Mr Obama is fighting to get the package through Congress.