Unemployment stays at 9.6%. Job loss 'far worse than economists had been predicting'

Not exactly the best economic news today:

The economy shed 95,000 nonfarm jobs in September, the Labor Department reported Friday, with most of the decline the result of the layoffs by local governments and of temporary decennial Census workers.

The steep drop was far worse than economists had been predicting.

While total government jobs fell by 159,000, private sector companies added 64,000 jobs last month. The unemployment rate, which measures the percentage of workers who are actively looking for but unable to find jobs, stayed flat at 9.6 percent.

The recovery that officially began in June 2009 has slowed considerably in recent months, raising concerns about the long slog the country will have to endure before the economy finally starts to feel healthy again. Private payrolls have been growing throughout 2009, but at a rate too sluggish to make much of a dent in unemployment. The outlook for the rest of the year is equally discouraging, economists say.

Very discouraging.

Congress has to pass an extension of unemployment benefits during the lame duck. Congress should do it, but it won't be easy.