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Crucial Jobs Report Gives Obama a Boost as Unemployment Falls to 7.8%, Lowest in 4 Years

| October 5, 2012

Click on the graph for larger view. (FlaglerLive)

Last Updated: 9:33 a.m.

The national unemployment rate fell to 7.8 percent in September, its lowest level since President Obama’s inauguration in January 2009, as the economy added 114,000 jobs in September, and revised figures for the previous two months boosted those totals by 86,000 jobs. In the last three months, the economy has added 434,000 jobs.

While September’s job creation was slightly below economists’ expectations, the revisions of the previous two months were above their expectations, and the sum total is certain to give the Obama campaign a psychological boost, now that the 8 percent unemployment threshold has been broken. There will be one more jobs report just five days before the election on Nov. 5. If that report produces 62,000 new jobs, then Obama will be able able to claim a net increase in jobs in his four years.

The economy stopped shedding jobs in February 2010. Since then, there’s been a net increase of 426,000 jobs. But even that figure is likely to double once the Bureau of Labor Statistics is finished recalibrating the numbers: Last week, the bureau announced that its re-calculations had adjusted employment upwards, with a net gain of 386,000 more jobs than have been included in jobs report so far. The catch: that recalibration will not be part of the Labor Department’s official statistics until February 2013. But it explains why, despite claims by Republicans that the economy is not as strong as it appears, consumers may be feeling a different reality. The BLS’s recalibration took place despite a net decrease of 67,000 more government jobs than originally calculated.

Just as important: the trend is going the president’s way, making Mitt Romney’s argument that the economy is not mending more difficult to sustain. The timing of the jobs report is such that it could also upstage what the Romney campaign had hoped would be a weekend-long reveling in its candidate’s thumping of Obama in the Denver presidential debate on Wednesday.

Unlike previous jobs reports this summer, September’s better numbers were buttressed by improving underlying trends, too: total employment in the country rose by 873,000, while the employment-to-population ration increased steeply, by 0.4 percentage points, to 58.7 percent. That’s the highest level since May 2010, and the steepest increase since before the recession. It’s the strongest indication that the unemployment rate is not falling because people are dropping out of the job market (as has been the case in Florida), but because they are reentering it, and finding work.

The civilian labor force participation rate also increased, but more modestly, from 63.5 percent to 63.6 percent. It was in the 66 percent range for the entire decade before the recession, though the Bureau of Labor Statistics projects that, even as the economy goes back to full power, the participation rate will fall to 62.5 percent by 2020 as the nation’s population ages and a larger share of it lives in retirement. In Palm Coast, for example, the civilian labor force participation is below 50 percent.

Finally, there is the so-called U-6 measure of unemployment and underemployment, the more accurate measure of the labor force as it takes into account all discouraged workers who’ve stopped looking for work and those who work part-time against their will (because they couldn’t find full-time work). That combined rate remained flat at 14.7 percent. The actual number of persons employed part time involuntarily rose from 8 million in August to 8.6 million in September. Looking closer, the rate of those unemployed 15 weeks or longer fell fractionally, and the rate of discouraged workers fell by 0.3 points.

Some highlights from the jobs report: Health care added 44,000 jobs in September. Transportation and warehousing added 17,000, financial activities 13,000 (including 7,000 in real estate) , and government jobs, which had been a drag on the economy because of the severity of the cuts in that sector, added 10,000.

Manufacturing, however, once a strength of the recovery, again lost jobs–16,000 in September, on top of the 22,000 lost in August. The losses were mostly in computer and electronic products, printing and related
activities. Employment in other major industries, including mining and logging, construction, wholesale trade, retail trade, information, professional and business services, leisure and hospitality showed little change over the month.

The average workweek for employees on private payrolls edged up by 0.1 hour to 34.5 hours in September. The manufacturing workweek edged up by 0.1 hour to 40.6 hours, and factory overtime was unchanged at 3.2 hours. Average hourly earnings rose by 7 cents to $23.58. Over the past 12 months, average hourly earnings have risen by 1.8 percent.

The unemployment rate by month, going back to 2002.

[This is a developing story. More soon.]

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11 Responses for “Crucial Jobs Report Gives Obama a Boost as Unemployment Falls to 7.8%, Lowest in 4 Years”

  1. Hoopty Doo says:

    Sure is wonderful. Now can I get my job back at McDonald’s?

  2. DoubleGator says:

    WOW just take a close look at the graph. The job losses during the last year of President Bush are STAGGERING. What a blood bath. What a legacy of red ink job losses. How about showing the job gains in blue for contrast. Contrast is good. So does President Obama get any credit for the gains? Nice to see we are coming out of this mess, all be it at a slow pace. I just wish the folks on Wall Street would have had to face some of this pain but all we get from them is push back on regulations to prevent this calamity from occuring again.

    • Magnolia says:

      DoubleGator: We are not coming out of this mess as long as the CBO has just announced the 4th straight year of $Trillion deficits.

  3. Palm Coast Resident says:

    Those new job numbers must have been calculated by “Acorn”. Y’all remember how they adjusted figures in the last presidential election, with fake ballots etc. These job figures are the same fake numbers Obama has asked for from his handlers. He gets what he wants…..we get lies. I smell a rate in the White House!
    It’s been there for almost four years and the smell is getting real bad…….Goodbye Obama!

  4. Dorothea says:

    @Palm Coast Resident

    The Acorn story is old and vastly exaggerated by a right wing hit squad. Read this old article and get some perspective on Acorn.

    Truth Lost Amid the Din

  5. The Truth says:

    If unemployment numbers are released and they’re higher, it’s Obama’s fault.

    If unemployment numbers are released and they’re lower, Obama is fudging the numbers.

    This man will never win with the Conservatives. They are determined to spread negative energy about everything he does no matter what. It’s really sad and pathetic.

  6. D W Ferguson says:

    Please –any boost to Obama based on this jobs report must be considered by the authenticity of the data- Anyone with an analytical mind /brain knows that the economy and employment stats are not getting materially better- To believe that the 800,000 + jobs created in September( the largest single month in 23 years) is true, then vote for Obama- this is the kind of Magic you can believe in- When I want to see smoke and mirrors , I go to the circus- sadly , America is now a three ring venue, with the oval office, the FED, and the Justice Dept. all parading around under the tent- Harry Reid and Nancy Pelosi are selling popcorn and drinks , mostly cool aid & Jim Jones type juice

    • Samuel Smith says:

      You might want to check your use of the word “analytical” in this situation, because it implies a reliance on facts and numbers instead of the innate gut feeling that you’re suggesting.

  7. Lonewolf says:

    Lets be optimistic conservatives….don’t you WANT the USA’s economy to get better?

  8. Outsider says:

    There are two numbers that are calculated here. The number of jobs created is determined by a survey of one third of ALL employers. From that number, a reasonably accurate number is calculated. For the unemployment rate, a survey of 60,000 households is conducted. That is a much smaller percentage of total households than the survey of employers. From that small sample a less accurate estimate is determined for the unemployment rate. This survey supposedly determine that nearly 900,000 peole foundjobs in September. So, apparently all but those 114,000 jobs created by emoyers were people who found work at home.

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