Fri October 5, 2012
Unemployment Rate Drops To 7.8 Percent; 114,000 Jobs Added To Payrolls
Originally published on Fri October 5, 2012 11:27 am
The nation's unemployment rate fell to 7.8 percent in September from 8.1 percent in August even though just 114,000 jobs were added to private and public payrolls, the Bureau of Labor Statistics reports.
Those hard-to-reconcile figures — a decline in the jobless rate even though job growth was relatively weak — appear to be at least partly explained by a sharp increase in the number of Americans who found part-time jobs and counted themselves as employed.
The decline in the jobless rate means that for the first time since President Obama took the oath of office in January 2009, unemployment is officially below 8 percent. With jobs and the economy atop the list of issues voters care most about, the report is sure to be a hot topic on the campaign trail.
We'll have more from the report, as well as reactions to it, shortly. As we said Thursday, this news is sure to be a hot topic on the campaign trail.
Update at 11:25 a.m. ET. Obama Hails News:
At a campaign event in Fairfax, Va., President Obama just said that today's report is a "reminder that this country has come too far to turn back now."
Though there are "still too many of our friends and neighbors" looking for work, Obama said, "we are moving forward again." Businesses, he said, "have now added 5.2 million new jobs over the past 2 1/2 years ... [and] the unemployment rate has fallen to its lowest level since I took office."
Update at 10:25 a.m. ET. Labor Secretary Says Talk Of "October Surprise" Is "Ludicrous."
We've added this post: Labor Secretary Says Talk Of Fudged Jobless Numbers Is Insulting.
Update at 9:48 a.m. ET. White House Says News Is "Further Evidence" That Economy Is On The Mend:
"While there is more work that remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression," White House top economic adviser Alan Krueger writes.
Update at 9:45 a.m. ET. Broader Unemployment Rate Stayed At 14.7 Percent:
The Wall Street Journal walks through how the "U-6" unemployment rate remained unchanged last month at 14.7 percent. That rate, as the Journal says:
"Includes everyone in the official rate plus 'marginally attached workers' — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that's all they could find."
Update at 9:30 a.m. ET. Romney Says This Isn't A "Real Recovery."
This statement from Republican presidential nominee was just released by his campaign:
"This is not what a real recovery looks like. We created fewer jobs in September than in August, and fewer jobs in August than in July, and we've lost over 600,000 manufacturing jobs since President Obama took office. If not for all the people who have simply dropped out of the labor force, the real unemployment rate would be closer to 11%.
"The results of President Obama's failed policies are staggering — 23 million Americans struggling for work, nearly one in six living in poverty and 47 million people dependent on food stamps to feed themselves and their families. The choice in this election is clear. Under President Obama, we'll get another four years like the last four years. If I'm elected, we will have a real recovery with pro-growth policies that will create 12 million new jobs and rising incomes for everyone."
Update at 9:15 a.m. ET. More On The Two Surveys:
As we just explained, the unemployment rate is based on a "household survey," while the figure on job growth comes from a survey of employers. The Financial Times notes that:
"The sampling error on the business establishment survey is plus or minus 100,000 jobs. The sampling error on the household survey is plus or minus 280,000 jobs."
Update at 8:55 a.m. ET. Two Surveys, Two Different Indicators:
The unemployment rate reported by BLS is based on surveys it does of households. Basically, researchers ask a series of questions to determine who is and isn't working, what types of jobs they have, whether they're actively looking for work, etc.
That survey produced an eye-popping number: an estimated 873,000 more people reported being "employed" in September than in August. Reuters says that was the biggest one-month jump in that indicator since June 1983.
The figure on payroll employment — in this case, a gain of 114,000 jobs — is based on a survey of public and private employers.
How could 873,000 more people be working if only 114,000 jobs were added to payrolls? One reason: 582,000 more people said they took part-time work "for economic reasons" last month.
Our colleagues at Planet Money have previously reported about how BLS puts its numbers together and the steps it takes to keep them secret. Today, it adds a post on "5 Ways Of Looking At Unemployment."
Update at 8:40 a.m. ET. How Did The Jobless Rate Fall If Job Growth Was Slow?
An increase of 114,000 jobs in an economy with a labor force of more than 155 million people wouldn't alone account for a sharp drop in the jobless rate. So why did the rate decline three tenths of a point?
The Associated Press notes that: "The economy also created 86,000 more jobs in July and August than first estimated. ... The revisions show employers added 146,000 jobs per month from July through September, up from 67,000 in the previous three months."
The BLS report also says there were 456,000 fewer people counted as being among the unemployed last month.
Update at 8:35 a.m. ET. First Time Below 8 Percent Since January 2009:
At 7.8 percent, the jobless rate is back where it was in January 2009 and is below 8 percent for the first time since President Obama was sworn in that month.