US President Obama slammed Republicans in the Senate for blocking passage of his aid legislation for small businesses as new data from the Department of Labor showed an increase in the US unemployment rate.

Unemployment in the US is now at 9.6%, up from 9.5% last month, but these results are largely due to the government’s release of 114,000 temporary census workers.

Around 54,000 people lost their jobs in August, while figures show that 67,000 people were hired in August, which means that the US government’s release of the census workers accounts for 87% of the newly unemployed in net terms.

This did not prevent a war of words between the president and republicans.

Obama pointed out that August was the eighth straight month in which jobs had been created rather than lost, which “reflects steps we’ve already taken to break the back of this recession.”

He said the senate’s delay in passing his legislation, providing a $30 billion lending fund to small businesses, making it easier for them to acquire credit, was jeopardising the economy’s recovery.

Republicans have fired back saying Obama’s White House is spending beyond its means, which is increasing uncertainty in the economy.

“The policies being pursued by the White House and Democrat leaders in Washington continue to create uncertainty and fear that is inhibiting productivity, innovation and job creation,” said Rep. Eric Cantor of Virginia, the House minority whip.

The dispute does not concern whether Obama’s stimulus initiatives have worked, figures show that they have, the dispute is over whether they have helped sufficiently to justify the increase in the government deficit.