Obama urges Congress to 'keep recovery going'

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Media captionPresident Obama: "The economy is growing stronger and the recovery is speeding up"

US President Barack Obama challenged Congress to keep the economic recovery going as new data showed unemployment down to its lowest rate in three years.

The unemployment rate dropped to 8.3%, beating analyst forecasts, and was down from 8.5% in December.

Speaking at a fire station in Virginia, the president warned Congress: "Do not slow down the recovery that we're on."

A Department of Labor report showed 243,000 new jobs were created in January, the highest in nine months.

The figures are a political boost for Mr Obama, whose re-election prospects hinge on a sustained economic recovery.

'True recovery'?

"Now, these numbers will go up and down in the coming months, and there's still far too many Americans who need a job, or need a job that pays better than the one they have now," Mr Obama said.

"But the economy is growing stronger. The recovery is speeding up. And we've got to do everything in our power to keep it going."

"Now is not is not the time for self-inflicted wounds to our economy. I want to send a clear message for Congress. Do not slow down the recovery that we are on, don't muck it up."

Mr Obama also urged congressional Republicans to pass legislation extending a payroll tax break for 160 million Americans through to the end of the year.

Leading Republicans acknowledged the improvement in the labour market, while adding that even more could be done to improve the state of the US economy.

"These numbers are encouraging, especially for those millions of Americans out of work, but we should aim even higher. We shouldn't settle, we can do more," House Majority Leader Eric Cantor said.

Meanwhile, Speaker of the House John Boehner said: "Our economy still isn't creating jobs the way it should be and that's why we need a new approach."

On the campaign trail, frontrunning presidential candidate Mitt Romney said: "Unfortunately, these numbers cannot hide the fact that President Obama's policies have prevented a true economic recovery."

Election prospects

Friday's data from the Labor Department showed job growth had been widespread, with large gains in business services, leisure and hospitality, and manufacturing.

The report was also buoyed by revisions to November and December data, which showed 60,000 more jobs created across the two months than previously reported.

The figures add to a range of data pointing to a gradual US economic recovery.

Last week, it was announced that the US economy expanded at a 2.8% annual pace in the October-December quarter, a full percentage point higher than in the previous quarter.

Earlier this week, a survey from the Institute for Supply Management (ISM) indicated that the US manufacturing sector expanded at its fastest pace in seven months in January.

But a report on Wednesday by the US Congressional Budget Office, a federal agency, forecast that unemployment would climb to nearly 9% in the last three months of this year and peak at 9.2% early next year.

Unemployment and economic recovery has been a dominant issue in the campaign for November's US presidential elections.

Although the downward trend in joblessness augurs well for Barack Obama's prospects of a second term, he is still likely to face more voters out of work than any post-war president.

When Ronald Reagan won re-election in a landslide victory in 1984, joblessness in the US stood at 7.5%.

In 1932, in the midst of the Great Depression, Herbert Hoover was voted out of office in a year when unemployment was at 23.6%.

His successor, Franklin Roosevelt, faced joblessness rates of 16.9% in 1936 and 14.6% when he was re-elected four years later, according to data from the US Bureau of Labor Statistics.

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