The economy added 80,000 nonfarm payroll jobs in October, allowing the unemployment rate to drop to 9 percent from 9.1 percent.
The jobs number was slightly below what economists had expected, which was 90,000 added jobs for October, according to consensus figures, but economists had expected the unemployment rate to stay unchanged.
The brightest spot in the jobs report was the Labor Department's revision of previous unemployment figures. The department revised August's figure to 104,000 jobs added from the previous 57,000, and changed September's number to 158,000 from 103,000.
Modest job growth continued in professional and business services sectors, leisure and hospitality, health care and mining, the Labor Department reported. Government employment, however, continued to trend down. Since April, the unemployment rate has stayed in a narrow range from 9.0 to 9.2 percent since April, the Labor Department reported.
Scott Brown, chief economist with Raymond James, said "one shouldn't make too much" of the drop in the unemployment rate, because the drop was concentrated in teenagers and young adults, which signals a seasonal adjustment for the school year.
College graduates have seen the highest gains, said Stephen Bronars, chief economist at Welch Consulting. Among adults age 25 and up, employment has fallen in the past year for individuals who do not have a college degree.
"This jobs report was more of the same we have seen this fall," Bronars said. "We are increasing jobs, but not at a fast enough pace given all the slack in the labor market."
John Bowler, director of country risk service with the Economist Intelligence Unit, said a positive note in the jobs report was that it confirmed the U.S. economy "is proving fairly resilient to turmoil in global financial markets related to the euro zone debt crisis."
Greek Prime Minister George Papandreou faces a vote of no confidence in the country's parliament on Friday, which may lead to greater uncertainty for Greece's bailout deal.
This week other jobs data pointed to positive signs in the labor market.
On Wednsday, Automatic Data Processing reported company payrolls rose by 110,000 in October, which was higher than expected, and revised September's jobs figure higher. Weekly unemployment claims dropped to their lowest level in five weeks, the Labor Department reported Thursday. Seasonally adjusted unemployment claims dropped by 9,000 for a total of 397,000 for the week ending Oct. 29.
Brown said it was possible that decreased unemployment claims could reflect the number of people who'd used up their unemployment benefits and were no longer looking for work.
"As people exhaust their unemployment benefits, they'll tend to drop out of the labor force," he said. "In some cases, you'll see unemployment go down when people aren't really gaining jobs."
For a more accurate picture of the unemployment situation, Brown said he goes to the unemployment-population ratio.
The employment-population ratio was little changed at 58.4 percent, as Brown had expected.
"In other words, we're running in place," Brown said. "That would be good if we were at full employment, but we have a lot of people we need to put back to work."
Federal Reserve chairman Ben Bernanke said that while the economy had been "slow" to add jobs, he believes current unemployment is mostly cyclical. Speaking at a press conference after the Federal Open Market Committee convened a two-day meeting, Bernanke said he did not believe unemployment was "structural," which means it results from more dire causes, such as workers' loss of skills.
Nevertheless, the committee increased its unemployment forecast to 8.5 to 8.7 percent in 2012 from its previous outlook of 7.8 to 8.2 percent.
Bronars said he had expected a "disappointing" jobs report, but certain sectors have fared better than others. The economy continues to see gains in business and professional service jobs, up 562,000 in the past year, and health care, up 313,000 in the past year.
Construction continues to lag and manufacturing is sluggish given all the jobs that were lost in the downturn, Bronars said.
"I don't see any evidence that this is when the job market is going to start taking off, but you never know," he said. "We haven't seen any increase in the labor force at all in the last year."
Bronars said the economy needed to add another 10 million jobs to return to prerecession employment levels.
"We haven't made a dent in this yet," he said.