U.S. unemployment fell to 8.1% in April as hundreds of thousands dropped out of the labor force, official figures showed Friday, smudging the start of President Obama's reelection campaign.
Labor Department data showed a meager 115,000 jobs were created in April -- the lowest number in six months -- in a report that did nothing to improve sentiment about the vitality of the economy.
Unemployment fell from 8.2% to the lowest level since Obama took office in January 2009, largely because 342,000 people dropped out of the labor force.
The participation rate fell to its lowest level in 30 years.
Obama, who kicked off his reelection campaign in battleground states Ohio and Virginia on Saturday, welcomed the drop in unemployment, but said there is more to do.
"After the worst economic crisis since the Great Depression, our businesses have now created more than 4.2 million jobs over the last 26 months (and) more than 1 million jobs in the last six months alone," he said.
"That's the good news, but there are still a lot of folks out of work, which means we have got to do more."
He urged Congress to pass "common sense" measures to create employment.
Republicans pounced on the report as further evidence of Obama's feckless management of the economy.
White House hopeful Mitt Romney slammed Friday's "terrible" report.
"This is way off from what should happen in a normal recovery," he said, adding that the economy should be creating half a million jobs a month.
Since Obama took office in January 2009, the unemployment rate has arched from 7.8% at inauguration to 10% as the impact of the financial crisis spread, and back down to 8.1% today.
Obama's fate could turn on whether he can convince voters that his policies avoided another Great Depression and that his rival would return to policies that failed in the past.
The fate of the recovery could turn on where the labor market goes from here.
Economists and investors were disappointed with Friday's data, poring over a report that showed the economy in limbo, and hinted at a decade-long wait before the recovery reaches pre-recession levels.
It was a "disappointing jobs report" said Paul Edelstein, an economist with IHS Global Insight.
"The economy isn't growing enough to generate substantial hiring, but isn't weak enough to justify additional monetary stimulus," Edelstein said.
But it was not all doom and gloom.
The Labor Department revised its March job-creation figure up by 34,000 to 154,000, causing some to predict a May boom as gasoline price pressures ease.
Meanwhile, former Labor Department economist Betsey Stevenson warned that falling participation rates might have more to do with long-term demographic trends than workers giving up the hunt.
She noted that participation rates have become more difficult to assess as the population gets older, students stay in school longer and adults work less.
The long-term drop in participation rates has been well-documented, hinging on the retirement of baby boomers, a trend that is only expected to increase.
Copyright Agence France-Presse, 2012