U.S. employment rose by a meager 36,000 jobs in January, far less than expected, as severe snow storms slammed large parts of the nation, but the unemployment rate fell to its lowest level since April 2009.

The increase in nonfarm payrolls reported by the Labor Department on Friday was a quarter of the 145,000 increase that economists had expected.

But there were sharp differences in the information contained in the two surveys the Labor Department uses to generate the employment report.

Its poll of households showed nearly 600,000 more people reported they were employed, which explains the sharp drop in the jobless rate to 9.0 percent. The rate has come down 0.8 percentage points since November, the biggest two-month decline since 1958.

The survey of business establishments gave a more somber assessment, although the government noted that severe weather could have affected construction payrolls, which dropped 32,000 last month. There were also large declines in the employment of couriers and messengers.

A department official also said 886,000 people in the separate household survey said they did not work in January because of severe weather. That was nearly double the average number for January, according to Wells Fargo chief economist John Silvia.

Weather did have an impact, construction was weak, below trend, and transportation and warehousing was also pretty soft and that could be affected by weather, said Sean Incremona, an economist at 4Cast in New York.

U.S. stock index futures fell on the data, while U.S. bond prices extended losses The dollar fell, then recovered against major currencies.

The modest jobs gains are at odds with other data for January, which had suggested employment growth was picking up and had raised hopes that the manufacturing-driven recovery was now spreading to other sectors of the economy.

UNEMPLOYMENT RATE DROPS

The drop in the unemployment rate was encouraging because it reflected more people finding work, even after adjustments for updated population controls. In recent months, a large portion of the decline in the jobless rate reflected people giving up the search for work, meaning they were no longer counted among the ranks of the unemployed.

Still, the decline is unlikely to discourage the Federal Reserve from completing its $600 billion government bond-buying program to support the economy.

The labor market has lagged the broader economy, which grew at a 3.2 percent annual rate in the fourth quarter. Fed Chairman Ben Bernanke on Thursday acknowledged the pick-up in the recovery, but said it will be several years before the unemployment rate has returned to a more normal level.

The government revised November and December payrolls to show 40,000 more jobs created than previously estimated.

All economic data is two steps forward, one step back. We're certainly going in the right direction; however, nowhere near as fast as everyone wants us to, said Robert Lutts, president and chief investment officer at Cabot Money Management in Salem, Massachusetts.

The Labor Department also finalized its annual benchmark revisions to its payroll series, which showed the level of employment for March 2010 was overstated by 378,000.

Last month, the private services sector added only 32,000 jobs after increasing 146,000 in December. The sector accounts for more than 80 percent of jobs in the United States.

Payroll increases in goods-producing sectors rose 18,000, as manufacturing employment grew 49,000, the largest increase since August 1998, after rising 14,000 in December.

Government payrolls dropped 14,000 in January, marking a third straight month of declines, pulled down by state and local governments.

The weather effect was also apparent in the average workweek, which slipped to 34.2 hours from 34.3 hours in December.

(Reporting by Lucia Mutikani; Additional reporting by Emily Kaiser in Washington and Chris Reese and Alina Selyukh in New York; Editing by Andrea Ricci)

Ben Bernanke Unemployment