White House says January jobs report encouraging

WASHINGTON (Reuters) - The White House on Friday welcomed the Labor Department's report that the unemployment rate had fallen to a five-month low, saying it showed encouraging signs of gradual "labor market healing."

With Americans increasingly anxious about high unemployment, President Barack Obama has declared that job creation will be his top priority in 2010.

"Even as today's numbers contain signs of the beginning of recovery, they are also a reminder of how far we still have to go to return the economy to robust health and full employment," said White House economic adviser Christina Romer.

The Labor Department said the unemployment rate fell to 9.7 percent in January, dropping below the psychologically important 10 percent level for the first time since September.

Obama's fellow Democrats fear voters could punish them in congressional elections due in November if the administration fails to make headway in tackling the jobless rate.

Election losses could threaten Democrats' majorities in the Senate and House of Representatives, affecting their ability to pass legislation and imperiling Obama's ambitious legislative agenda.

"While unemployment remains a severe problem, today's employment report contains encouraging signs of gradual labor market healing," Romer added.

Romer cautioned there would likely be "bumps in the road ahead" and said it was important not to read too much into one monthly report.

"Obviously, the unemployment rate remains unacceptably high, and is even worse for certain demographic groups such as teenagers and black or African American workers," she said.

(Reporting by Ross Colvin; Editing by Will Dunham)