U.S. Jobless Rate Unexpectedly Falls to 7.8%; 114,000 Jobs Added

[AdamT]

Good timing for the President after his lackluster debate performance.

The unemployment rate in the U.S. unexpectedly fell to 7.8 percent in September, the lowest since President Barack Obama took office January 2009, as employers hired more part-time workers.The economy added 114,000 workers last month after a revised 142,000 gain in August that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 92 economists surveyed by Bloomberg called for an advance of 115,000. The jobless rate dropped from 8.1 percent and hourly earnings climbed more than forecast.


Improving employment prospects that lead to stronger wage growth provide workers with the wherewithal to boost their spending, helping cushion the economy from a global slowdown. Today’s employment report is the penultimate before the November elections as President Barack Obama and challenger Mitt Romney debate whose policies would best spur job growth.

 

[Samhain]

I like how adding 114k jobs resulted in an increase of employed persons of 800k. Quite the dubious math.

 

[American]

September jobs report probably won't sway election - Oct. 5, 2012

Jobs Report May Mean More to Presidential Race Than Markets - US Business Blog - CNBC

Sorry to burst your little bubble, but CNN is contradicting itself, and CNBC doesn't agree with your report.

 

[Rainman05]

I would like to know what those jobs are... and if they are jobs that can bring people into the middle class or not. If not, then its a very, very small victory...

 

[AdamT]

It is a small victory, but they add up. Median income rise is nice, too.

 

[Sheik Yerbuti]

Good timing for the President after his lackluster debate performance.

This should get him back many, if not more, of the votes he lost since Wednesday night.

What's good for America is bad for Conservatives.

 

[Samhain]

I like how adding 114k jobs resulted in an increase of employed persons of 800k. Quite the dubious math.

Figured it out. 600k took part time jobs because they couldn't find a full time one.

 

[Sheik Yerbuti]

I like how adding 114k jobs resulted in an increase of employed persons of 800k. Quite the dubious math.

Your confusion stems from comparing payroll data with current population survey data. Here's a clue ... That 114,000 net gain does not factor into the unemployment rate.

 

[Helix]

the "unexpectedly" drinking game continues.

i'm glad for any good news, and at the same time, i find the 7.8 percent figure to be dubious. hopefully, we'll have a strong holiday season to momentarily fix some of the problems. i think we're continuing to head towards recovery, but the fundamental problems with our economic model remain. this is due to the fact that there isn't enough wealth at the bottom to sustain the local economic ecosystem of small and medium sized businesses efficiently.

 

[donsutherland1]

The report contained some indications of improvement e.g. the increase in hourly earnings. A big boost in part-time jobs led to the large drop in the headline unemployment rate. If one looks at the broadest measure of the employment situation (U-6) that takes into consideration people who are employed part-time for economic reasons, that measure remained unchanged at 14.7%.

The important question going forward concerns whether some share of those part-time jobs will turn into full-time ones. If such a transition is to occur, uncertainty concerning aggregate demand will need to decrease so that businesses have sufficient confidence to make full-time commitments. Headwinds concerning structural factors in the U.S. persist. An additional risk factor is the "fiscal cliff." Another risk factor concerns the possible impact of economic slowdowns in parts of Asia and the emergent contraction in parts of Europe. As a result, firms remain more cautious than usual in their hiring. Hence, in the current environment, some firms that would normally hire full-time employees to help meet demand for their goods and services are presently hiring people on a part-time basis.

In terms of the political impact, the headline figure's dropping below the psychological 8% barrier increases the President's prospects of re-election. However, there will be one more release of employment information prior to the election (11/2). Should September's and earlier figures be revised to show less progress and should October's employment figures prove weak, that could have an adverse impact on his re-election chances.

 

[tessaesque]

I just read an article on my cell phone (trying to find it online) that was published on Thursday and said the jobs report was expected to show an increase of 110k jobs and a stationary unemployment rate of 8.1%. I'm curious as to how 4k jobs was enough to drop unemployment from 8.1% to 7.8%.

 

[iliveonramen]

I just read an article on my cell phone (trying to find it online) that was published on Thursday and said the jobs report was expected to show an increase of 110k jobs and a stationary unemployment rate of 8.1%. I'm curious as to how 4k jobs was enough to drop unemployment from 8.1% to 7.8%.

that's a good question.

So why are these numbers giving us seemingly contradictory evidence? The first thing one must understand is that these two numbers are drawn from two different surveys. The new jobs number is rendered from the establishment survey, whereby the Labor Department surveys employers to determine how many new jobs they’ve added. The unemployment rate, on the other hand, is determined by a survey of households, in which the government asks individuals whether or not they and those in their household have jobs. So, the first reason why these two numbers appear to be at odds is that they are pulled from different estimates, each with its own margin of error.

Second, when the Labor Department releases its estimate for each month, it actually releases revised estimates for the previous two months — and the job market in July and August was apparently healthier than we had previously thought. The Labor Department revised job gains in those months from +96,000 and +142,000 to +141,000 and +181,000, respectively. In addition, a recent yearly revision by the Labor Department showed that job growth between April of 2011 and March of 2012 was much more significant than we thought. With these revisions in mind, the drop in the unemployment rate makes more sense.

Read more: Unemployment Rate Drops to 7.8% But Path to Recovery is Murkier | Business | TIME.com

Edit: I'd like to point out...Americans knew this collectively in a way. They were much more optimisitic about the economy than the numbers would support. American people were right, numbers were too low.

 

[lizzie]

I just read an article on my cell phone (trying to find it online) that was published on Thursday and said the jobs report was expected to show an increase of 110k jobs and a stationary unemployment rate of 8.1%. I'm curious as to how 4k jobs was enough to drop unemployment from 8.1% to 7.8%.

I figure it has to do with the increasing numbers of people dropping out of the workforce entirely, and some of the part-time jobs created.

 

[tessaesque]

that's a good question.







Read more: Unemployment Rate Drops to 7.8% But Path to Recovery is Murkier | Business | TIME.com

That clears up some of the confusion I had. Thank you.

 

[Samhain]

Don't forget to add in the 183k increase in folks having two jobs.

 

[Erod]

Desperate manipulation of numbers at its finest.

Plus, any jobs improvement at this point is from the private sector anticipating a change in the presidency in the offing.

 

[tessaesque]

Desperate manipulation of numbers at its finest.

Plus, any jobs improvement at this point is from the private sector anticipating a change in the presidency in the offing.

More likely its retail beefing up staff for the coming holiday season. They start putting out Christmas stuff a few weeks ago.

 

[Erod]

I figure it has to do with the increasing numbers of people dropping out of the workforce entirely, and some of the part-time jobs created.

Yep, a bunch of recent graduates have given up and gone back to college for more schooling.

 

[Samhain]

More likely its retail beefing up staff for the coming holiday season. They start putting out Christmas stuff a few weeks ago.

But the numbers are adjusted for the seasonal work. Now, if retails are front loading when the norm doesn't reflect that, then we would see a more lackluster performance the next two months.

 

[American]

This kind of news has been predicted for months, that the labor dept would come out with a unemployment figure ridiculously low to help the President. And voila, here it is right on cue.

 

[Jredbaron96]

Good Job everybody.

 

[jimbo]

The number is about bad math, not jobs. Obama's dismal performance at the debate needed something to counter and divert. So, a new unemployment figure. This takes the talking point of 43 months of over 8% unemployment off the table.

It seems to me like someone in the Obama group has a basket of these tidbits that are reserved and trotted out whenever necessary. Thus we get Zimmerman, a months old case which had already been resolved, the muslim video, a months old very poor video which has had no impact for months suddenly being touted as the cause of massive anti American riots and direct invasions of our sovereign ground in the mid east, just in time to divert from the real cause. Mitts taxes, a non story. The list goes on. Now conveniently when Obama needs another diversion, new unemployment numbers, which will be revised upward after the damage is done.

It is going to be interesting to see what is on the table for the necessary diversion after the Biden - Ryan debates.

 

[Blue_State]

I would like to know what those jobs are... and if they are jobs that can bring people into the middle class or not. If not, then its a very, very small victory...

Not sure if this is what you were looking for:

Of the 114,000 new net jobs added in September, healthcare accounted for 44,000, while transportation increased by 17,000 and financial services grew by 13,000. That included a gain of 7,000 jobs in the real estate sector, another sign of a recovering housing market.

Manufacturing, however, lost 16,000 jobs, underscoring the slowdown in exports and business investments.

Unemployment falls sharply to 7.8%, a 3 1/2-year low - latimes.com

 

[Sheik Yerbuti]

Desperate manipulation of numbers at its finest.

Plus, any jobs improvement at this point is from the private sector anticipating a change in the presidency in the offing.

Then the private sector must have been anticipating a new president for the last 2.5 years since the private sector has added some 5 million jobs over that period for 31 consecutive months of growth.

 

[Blue_State]

The report contained some indications of improvement e.g. the increase in hourly earnings. A big boost in part-time jobs led to the large drop in the headline unemployment rate. If one looks at the broadest measure of the employment situation (U-6) that takes into consideration people who are employed part-time for economic reasons, that measure remained unchanged at 14.7%.

/snip

Not sure if you know this, but I figured I would ask since you brought it up. Does the increase in hourly earnings take inflation into consideration?