Washington (CNN) – The nation's unemployment rate fell to 9.7 percent in May, the Labor Department reported Friday.
That's a drop of two-tenths of a percent from April's 9.9 percent level. Analysts had expected to rate to fall to 9.8 percent.
The Labor Department also reports that the economy added 431,000 jobs in May, the biggest monthly gain since March of 2000. But economists had forecasted a gain of 500,000 jobs.
Of the jobs added, 390,000 were in the government, with the private sector adding 41,000 jobs, down from 218,000 in April.
President Barack Obama said Friday that the economy's addition of 431,000 jobs in May is another sign that an economic recovery is underway, though he also warned that there are going to be "some ups and downs" in the months ahead.
"The economy's getting stronger by the day," he said during a visit to a commercial truck dealership in Hyattsville, Maryland.
But Obama said the recovery's "still in its early stages."
"Even if you put those temporary (Census) jobs aside, there's no doubt we saw another month of private sector job growth," Obama said. The president argued that the new jobs numbers were evidence that his economic program is working.
Obama slammed his Republican opponents, arguing that the country "can't go back to the very same policies that failed us in the last decade."
"I don't want to go backward. I want to move forward," he said, echoing a campaign-style theme he stressed earlier in the week in a speech in Pittsburgh, Pennsylvania.
A top Congressional Republican was quick to react to the report.
"Count me among the millions of Americans who welcome a jobs report that shows jobs gained rather than more jobs lost," said Rep. Eric Cantor of Virginia, the House Republican Whip. "But a look beneath the numbers should give this Administration – and every American – cause for concern. We have to begin to address the structural deficiencies in our economy. Temporary or government jobs are not optimal, and private sector job growth simply isn't keeping pace with a growing labor force."
"I welcome job growth any day, week or month of the year, but the figures released today need to be stamped with 'Buyer Beware'," says Republican National Committee Chairman Michael Steele, in a statement.
"The underlying fact is that 9.7 percent unemployment is unacceptable by any standard. No amount of spin will resolve the fact that the President's policies have been a colossal failure when it comes to creating jobs. If his speech in Pennsylvania was any indication, President Obama has no intention of slowing his high-spending, big-government agenda that prevents the private sector from creating the jobs we need to put our economy back on track," adds Steele.
– CNN's Scott Spoerry contributed to this report