The economic recovery took a hit Friday when the government announced unemployment rose in August one-tenth of a percentage point to 9.6%. The private sector of the economy improved a bit, but sizable hits to the public sector reduced the number of total jobs by 54,000, according to the U.S. Bureau of Labor Statistics.

The nation’s job picture has not changed much over the course of the summer. The unemployment rate has hovered between 9.5% and 9.7% from May through August. The administration of President Barack Obama announced its intention to pay more attention to the economy after earlier this week halting combat operations in Iraq. Obama has not had much success turning the economy around, in part because of resistance to pumping any additional money into an economic recovery with mid-term elections on the horizon.

In even worse news, the percentage of U.S. citizens who did not have a job and were not even looking for one — a broader and less-used measure of unemployment — rose to 16.7% from 16.5% one month earlier.

Public Sector Struggling

The public sector, made up of government workers, fared poorly in the past month. State and federal governments terminated 10,000 full-time employees in August. Meanwhile, the federal government dismissed 114,000 part-time Census workers as the project came to an end.

Government services on federal, state and local levels have faced steep cuts in recent months as the nation has tried to limit its surging deficit and some states have teetered on the brink of bankruptcy while municipalities have struggled to find funds for schools. Politicians cannot decide on a way to bring employment numbers down: Democrats insist more spending and additional bills would help bolster a recovery while Republicans argue the administration’s stimulus plan has actually hindered job creation and economic recovery.

Manufacturing Underwhelming

The private sector fared better than the public sector, but did not perform as well as anticipated. The manufacturing industry, which many economists pegged as a probable area of growth, actually lost 27,000 jobs as automakers faltered. Construction and health care were the two strongest industries in August, gaining 28,000 and 19,000, respectively. The private sector as a whole gained 67,000 jobs.

Here’s what President Obama had to say about the economy:

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