Unemployment drops Topic

Below 8%


September, lowest since Jan. 2009; hiring increases

By Christopher S. Rugaber, The Associated Press | Associated Press – 1 hr 52 mins ago

WASHINGTON - The U.S. unemployment rate fell to 7.8 per cent last month, dropping below 8 per cent for the first time in nearly four years. The rate declined because more people found work, a trend that could have an impact on undecided voters in the final month before the presidential election.

The Labor Department said Friday that employers added 114,000 jobs in September. The economy also created 86,000 more jobs in July and August than first estimated. Wages rose in September and more people started looking for work.

The revisions show employers added 146,000 jobs per month from July through September, up from 67,000 in the previous three months. The unemployment rate fell from 8.1 per cent in August, matching its level in January 2009 when President Barack Obama took office.

The decline could help Obama, who is coming off a disappointing debate performance against GOP challenger Mitt Romney.

The report may be the last to sway voters. The October jobs report will be released only four days before Election Day.

"An overall better-than-expected jobs report, consistent with most recent data that suggest the economy is gaining some momentum," said Sal Guatieri, an economist at BMO Capital Markets, in a note to clients. "The sizeable drop in the unemployment rate could lift the President's re-election chances following a post-debate dip."

Stock futures rose modestly after the report. Dow Jones industrial average futures, up 30 points just before the report came out, were up 45 points after it was released.

The yield on the 10-year U.S. Treasury note climbed to 1.73 per cent from 1.68 per cent just before the report, a sign that investors were more willing to embrace risk and moving money from bonds into stocks.

The job market has been improving, sluggishly but steadily. Jobs have been added for 24 straight months. There are now 325,000 more than when Obama took office.

In September, the number of people who said they found work soared 873,000 and the size of the work force also increased. That brought the number of unemployed down to 12.1 million, the fewest since January 2009.

Those figures come from a survey of 60,000 households that determines the unemployment rate. The government also does a second survey of roughly 140,000 businesses to determine the number of jobs created or lost.

The September job gains were led by the health care industry, which added 44,000 jobs — the most since February. Transportation and warehousing also showed large gains. The revisions showed that governments actually added 63,000 jobs in July and August, compared with earlier estimates that showed losses.

Still, many of the jobs added last month were part time. The number of people with part-time jobs who wanted full-time work rose 7.5 per cent to 8.6 million.

10/5/2012 11:25 AM
This is the household data.  The establishment survey data was terrible. The 114,000 number of jobs created on net in September is well below the average for this year (146,000) and the average for last year (153,000). This is wholly consistent with the story that the economy is decelerating sharply as we head into the fall.
Back when President Bush presided over a jobless recovery, the household survey tended to show better news. At the time, every media organization carefully emphasized the establishment numbers, and warned that the household numbers are suspect.
10/5/2012 1:02 PM
SPIN, SPIN, SPIN! Republicans spinning **** again trying to make the voters dizzy. 
10/5/2012 1:04 PM
Actually it's called economics.  It's what the left eschews when they suggest that wealth redistribution will solve the recession.
10/5/2012 1:24 PM
What recession?
10/5/2012 1:28 PM
10/5/2012 1:39 PM
Yep, we got an economic wiz in the Oval Office!
10/5/2012 2:00 PM
10/5/2012 2:17 PM
Only 114k added to the workforce.  Where did the rest of that .3% come from?
10/5/2012 2:46 PM

The Job Numbers: Sadly Nothing to Be Excited About


The excitement about three-tenths of one percent drop in the unemployment rate expressed this morning in several media outlets tells you a lot about how low our exceptions about the economy have become. Have we gotten so used to an 8 percent unemployment rate and are we so pessimistic about the outlook of our economy that a rate slightly below that number is interpreted as great news?

Even leaving aside the discrepancy between the federal government’s two main jobs surveys, this is a very small drop. Here is some perspective from Ezra Klein:

The fact is that there’s not much that needs to be explained here. We’ve seen drops like this — and even drops bigger than this — before. Between July and August the unemployment rate dropped from 8.3 percent to 8.1 percent — two-tenths of one percent. November-December of 2011 also saw a .2 percent drop. November-December of 2010 saw a .4 percent drop. This isn’t some incredible aberration. The fact that the unemployment rate broke under the psychologically important 8 percent line is making this number feel bigger to people than it really is.

I agree with Klein that there is nothing to be very excited about.

In addition, while I would like to believe that this morning’s jobs report is a product of significant improvement in the job market, I can’t help being skeptical. Granted the economy added 114,000 jobs last month. It is not great but it is good news. Knowing that more people have jobs today than they did last month is a cause for celebration, even if we wish the number were higher.

It is, however, hard to reconcile this 114,000 number with other indicators. Based on past projections, an addition of 114,000 jobs to the economy should result in an unemployment rate closer to 8.1 percent than to 7.8 percent.

As Kevin Hassett explained, there is a disconnect between how few jobs were added to the economy and the drop in unemployment:

The professional economists and the press usually emphasize the establishment survey because it is viewed as less volatile. The establishment survey was terrible. The 114,000 number of jobs created on net in September is well below the average for this year (146,000) and the average for last year (153,000). This is wholly consistent with the story that the economy is decelerating sharply as we head into the fall.

The household survey, on the other hand, portrays a September that was booming, far more so than could possibly be true given the other indicators. According to it, the unemployment rate dropped to 7.8 percent, with total employment jumping by a whopping 873,000.

Next month’s unemployment rate will be interesting to watch. Based on everything I have read this morning, I am thinking that the unemployment rate may jump back up in the next report when you get a better sample from the survey.

Here are a few things to note:

To the extent that there is improvement, it seems to be in government employment because of teachers going back to school. My colleague Keith Hall noted that “although job growth over the prior two months was revised up by 126,000, job growth in the private sector was revised down by 4,000 as all of the upward revision was in government.” He adds in an e-mail to me:  ”Let me also point out that the employment series underlying the UR is very volatile. It showed a gain of 872,000 jobs, but it also showed a loss of 314,000 jobs in July and August combined.”

To the extent that there is improvement, it is also because people who were looking for full-time employment settled for part-time jobs to survive until the economy recovers. We will notice an increase of 582,000 in the number of workers employed in part-time jobs.

BLS data shows that there are still 61,000 fewer people employed today than in January 2009 (the data is from BLS, Table B-1 seasonally adjusted “Employees on nonfarm payrolls,” accessed October 5, 2012). This is disconcerting to say the least and tells you how slow this recovery has been. 

If you are interested in the job situation in the states, check out this piece by Keith Hall.

For a really good take on the trends in labor-force participation, check out this piece by James Sherk.

10/5/2012 4:23 PM
So wait....Repubs claim that the Pres is doing a crappy job because the unemployment is over 8% (which all of you have been touting for awhile)....and when it drops below 8%, it means nothing?  Seriously.  
10/5/2012 4:37 PM
What i also find funny, is that when something good about our country comes out, one side has to bash it and down play or whatever to spin it as a negative.  ******* pathetic (goes for both sides).  

10/5/2012 4:48 PM
We're not the ones spinning it. This jobs number is about the same as it's been the past few months. No way does it drop that far with such small job creation.

The only reason we're close to 8% is because this administration has wiped over 1 million jobs off the books. He says they will never come back. The truth is the unemployment rate under those numbers is about 10%. Actual real unemployment without all the bullshit is more like 14% or higher.

I hope President Romney, after he kicks *** on getting us some jobs and cleaning up Washington, finds the time to give us a true barometer with realistic numbers.
10/5/2012 5:20 PM
7.8 is still ****** as hell.  Most of the decline is from people giving up hope.
10/5/2012 6:43 PM
And even if the numbers were accurate....

How low have the expectations of the left fallen that 7.8% gets them dancing a jig?

After 4 years in office and a virtual free hand to carry out his agenda is this all we have? 

Does that mean after another 4 years we will be where...7.4%?
10/5/2012 10:48 PM
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