Unemployment rate falls to 5.6 percent in January

WASHINGTON - The nation&#39;s unemployment rate unexpectedly dropped to 5.6 percent in January as businesses slowed their job cuts to the lowest level since before the terrorist attacks. <br> <br> The Labor Department reported Friday that the jobless rate fell by 0.2 percentage points, reversing December&#39;s same increase. Businesses slashed 89,000 jobs from their payrolls in January, which followed job losses that averaged 311,000 a month in the last three months of 2001. <br> <br> Economists had predicted the unemployment rate would tick up from December&#39;s 5.8 percent rate, but employment gains in construction, air transportation and retailing helped offset expected job losses in other industries. <br> <br> Analysts say the nearly yearlong recession, which started in March, could be ending. The government reported this week that the U.S. economy managed to eke out a 0.2 percent increase in growth in the final three months of the year, bolstering hopes of recovery. <br> <br> But Labor Department officials cautioned against reading too much into January&#39;s positive employment news. January tends to reflect large seasonal movements after the holidays, and that can skew the outlook on the job market. <br> <br>

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