US payrolls contracted in September for the first time in seven years as major hurricanes left workers idled in southern states but unemployment continued to fall, official data showed Friday.

Total non-farm employment fell by 33,000 net positions for the month, with a steep drop-off in hiring at restaurants and bars, according to the Labor Department.

But the unemployment rate fell another two tenths to 4.2 percent, its lowest level since February of 2001.