A smaller than expected 35,000 jobs were lost overall in the US last month as hiring in some regions was offset by lay-offs stemming from the damage caused by Hurricane Katrina.
Labor Department figures showed that the US unemployment rate kicked up to 5.1% - the highest rate since May - from 4.9% in August. Wall Street economists had expected a higher job-loss total of 143,000.
The department indicated that September payroll growth would probably have been in line with the 194,000 jobs a month that have been created on average over the past year if not for the blow suffered from Katrina, which struck the Gulf Coast on August 29.
Another hurricane, Rita, hit during the third week of September, affecting the collection of the monthly jobless data, but its impact will not be captured until next month's report. September marked the first month in which there were job losses since May 2003, when 26,000 were cut.
The department revised up its estimates for job growth in July and August by a combined 77,000. It said there were 211,000 jobs created in August instead of 169,000 and 277,000 in July rather than 242,000.
