Unemployment falls sharply to 7.8%, a 3 1/2-year low
The nation’s unemployment rate fell sharply to 7.8% in September, the lowest level since January 2009 when President Obama took office. And the government reported Friday that job growth this summer was stronger than previously estimated.
Overall, the economy added 114,000 jobs in September, in line with analysts’ expectations. Job growth for August was revised up to 142,000 from 96,000; and the new-jobs figure for July was bumped up to 181,000, from 141,000 previously estimated.
Far more surprising was the dramatic 0.3 percentage point decline in the jobless rate, which all year long had been hovering between 8.1% and 8.3%. The big drop would seem out of sync with the modest job gains last month.
But the explanation is that the unemployment figure is based on a different survey than the one that produces the monthly payroll job tally. The job growth numbers come from a survey of employers and is considered more reliable month to month.
The Labor Department also surveys 60,000 households, and this one, while more volatile, includes a broader category of workers such as the self-employed and people working in family businesses and even in the underground economy.
Based on the household survey, there were 873,000 more people working in September than the prior month. There was a huge increase in the number of part-time workers because of slack business conditions. And the number of unemployed fell by 456,000 last month from August.
The drop in the jobless figure, though likely to be seen with skepticism from some corners, will be welcomed by the Obama administration. For the month that’s remaining in the campaign, his challenger, Mitt Romney, will no longer be able to say that unemployment has been above 8% since Obama took office.
Still, job growth as measured by the survey of establishments was hardly impressive. Even with the upwardly revised figures for July and August, the average for the third quarter was only about 146,000 -- slower than the pace of early this year and still leaving the economy about 4 million jobs shy of the payroll employment in late 2007 when the recession began.
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.
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