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Jobless Rate Falls to 7.8%, Lowest Since January 2009

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The nation's unemployment rate dropped sharply to 7.8 percent in September, its lowest level since the month President Obama took office, the Labor Department said Friday.

While employers added only a modest 114,000 jobs last month, the jobless rate declined from 8.1 percent in August. The unemployment rate fell because more people were working, not because discouraged job seekers stopped looking, the numbers showed.

Adding to the positive news, job gains were revised upward by 40,000 for July (to 181,000) and by 46,000 for August (to 142,000), casting a slightly rosier light on what had been perceived as a summer slump.

Rising employment is good news for President Obama a month before the election as he vies to convince voters that he is better equipped than his Republican opponent, Mitt Romney, to steer the economy back to health.

Though the new numbers were in line with a surge in consumer confidence last month, even before their release some of the president's detractors were trying to suggest that the data were, or could be, manipulated in the incumbent's favor.

On CNBC, Labor Secretary Hilda Solis dismissed the implications as "ludicrous" and there was no evidence of any irregularity.

The Bureau of Labor Statistics, which is part of the Labor Department but has no political appointees at the moment, computes the numbers from two surveys,one of businesses and one of households. By definition, the data in both surveys are not precise and are subject to regular revisions. Recently, those revisions have showed a strengthening labor market, suggesting that if anything the economy may be improving more than initially reported.

Still, Mr. Romney took issue with any positive interpretation of the latest jobs report.

"This is not what a real recovery looks like," he said in a statement. "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."

Indeed, manufacturing, one of the bright spots that Mr. Obama has showcased throughout the re-election campaign, fell 16,000 jobs after losing a revised 22,000 in August in the face of a global slowdown. And the number of temporary jobs, usually considered a harbinger of future growth, fell 2,000.

Still, while Republicans can criticize the recovery's mincing pace, Democrats can point to the 24th straight month of overall job growth after a severe financial crisis.

Senate Majority Leader Harry Reid, Democrat from Nevada, said the report "shows that the balanced policies advanced by President Obama and Democrats in the House and Senate are working to move our economy forward."

The private sector, which has been adding jobs since March 2010, grew by 104,000 workers in September. Governments, where job cuts have been a drag on the recovery, added 10,000 jobs, their third straight month of gains.

Wages and hours worked ticked up, combining to increase earnings by 0.7 percent, and construction jobs grew by 5,000 as a housing market recovery began to gain momentum.

There are now almost the same number of jobs as when Mr. Obama took office in January 2009. Since the economy stopped hemorrhaging jobs in February 2010, there has been an increase of more than 400,000. A mere 62,000 increase in the number of jobs would allow Mr. Obama to claim a net increase in jobs over his tenure.

This year, the economy has added an average of 146,000 jobs a month. Economists say that job growth of between 100,000 and 175,000 a month is essentially neutral in terms of its effect on the election, while anything greater would favor the incumbent.

Still, Nigel Gault, the chief United States economist at HIS Global Insight, wrote that he believes Friday's report was "highly significant politically" but "less significant economically," noting that underemployment, which counts people who would like to work full time but can find only part-time jobs, was unchanged over August. It was down over the year, from 16.4 million to 14.7 million.

If the jobs report seemed like a tale of two economies - one with a rapidly improving jobless rate, the other with mediocre growth in new jobs - it is because the business and household surveys can often capture very different pictures of what is going on.

The household survey, which showed a whopping increase of 873,000 people working, is much more volatile and prone to sampling error. But it captures aspects of the labor market that the business survey does not, like self-employment, household workers and farm workers. Economists said that this month's household survey likely overstated the improvement, but deserved credibility because it matched the unexpectedly robust rise in consumer confidence in September.

Critics can be quick to write off a falling jobless rate as the result of job seekers who grow discouraged and stop looking for work, meaning they are no longer counted as part of the labor force. But that is not the story of the past year.

Participation in the labor force has inched up, even though demographic factors like the aging population would suggest that it should be falling, depressed economy aside. "The labor force is not growing as much as the population is growing but the number of people employed and the employment-to-population ratio are growing," said Betsey Stevenson, a labor economist and professor of public policy at the University of Michigan. "That's what you need to bring the unemployment rate down."

Representative Kevin Brady, a Republican from Texas and vice chairman of the joint economic committee, said the drop in the unemployment rate "was driven primarily by an increase of 582,000 in the number of workers employed involuntarily in part-time jobs. These workers need and want full-time jobs." About 6 percent of all workers are part-time when they would prefer to work full-time.

Like Republicans and Democrats, consumers and businesses have divergent views of the economic situation. Consumers have shown increasing confidence as stocks rise, home prices stabilize and their perception of the job market becomes sunnier.

Business leaders have been hanging back, though, more focused on global economic slowing and domestic concerns. They say they are uncertain what the election will mean for the business climate and are waiting in part for a resolution of the so-called fiscal cliff, a host of tax increases and budget cuts that will be triggered at the end of the year if Congress fails to act.

Harry Kazazian, the chief executive officer of Exxel Outdoors, a maker of camping equipment in Alabama, said the election, the fiscal cliff and rapidly shifting regulations had put him in a cautious mood.

With sales on the rise, Exxel has restarted a capital investment plan that it suspended three years ago, but is doing so slowly. "We're moving forward, but we're doing it in steps rather than being much more aggressive and putting ourselves out there," Mr. Kazazian said. "I wouldn't be surprised if things start turning the other way, meaning down."

But at a Walmart in Atlanta, shoppers were loosening the reins a bit, buying what they described as small indulgences like scented candle oil and seasonal beer.

Linda Avery, 50, a food service manager, said her income had not changed but her daughter had moved out of the house, reducing her food and utility expenses.

Michael Peacock, 43, said that although his house was in foreclosure, his chosen field, online marketing, was improving to the point where he could even turn down some jobs that were outside his specialty.

"I can see people shopping," Ms. Avery said, surveying the store. "You just feel like things are getting a little better."

The polling firm Gallup pinpointed September's rise in consumer confidence to the first day of the Democratic National Convention, and said it was almost entirely because of increased optimism among Democrats, while confidence among Republicans held steady at low levels. But Gallup could not say whether politics or improving economic conditions drove the change.

The discrepancy between consumers' mood and the outlook of companies can be easily explained, economists said. "Businesses are much more forward looking," said Ellen Zentner, the senior United States economist for Nomura Securities International.

Concerns over the fiscal cliff had begun showing up in business surveys in April, she said. "It's been weighing on their investment and hiring decisions for quite some time."

In a survey of 400 chief financial officers conducted this summer, Grant Thornton, a management consulting firm, found that many had shifted from neutrality to pessimism, with 45 percent of respondents saying they expected their work force to hold steady and 18 percent saying they expected it to shrink over the next six months. A large majority said they expected both health care costs and salaries to increase.

Stephen Chipman, the chief executive of Grant Thornton, said there appeared to be genuine growth in the technology, high-end manufacturing and energy sectors, while growth in health care was largely a result of consolidation and increased efficiency, and financial service hiring was largely driven by the need to comply with more regulations.

Still, the overall picture may be better than previously thought. Monthly job estimates are notoriously imprecise and often fall within the margin of error, and the adjustment process is slow.

In an annual recalibration last month, the Bureau of Labor Statistics estimated that there were actually 400,000 more jobs added in the 12 months that ended in March than was previously thought. That benchmark will not be incorporated into the monthly jobs figures until early next year.




http://mobile.nytimes.com/2012/10/06/business/economy/us-added-114000-jobs-in-september-rate-drops-to-7-8.xml
Posted on CafeMom Mobile
by on Oct. 5, 2012 at 2:11 PM
Replies (11-20):
kailu1835
by Silver Member on Oct. 5, 2012 at 3:39 PM
2 moms liked this

They base it on the people who left the work force because they were unable to find work.  This is not a difficult concept.

Quoting deepthinker:


Quoting kailu1835:

No they aren't, because when a ton of people left the job force, because of the reasons I mentioned, the unemployment rate went down, regardless of the fact that there were still so many people actually unemployed who would rather be employed.

http://www.foxbusiness.com/government/2012/10/05/real-unemployment-rate/print

Quoting deepthinker:


Quoting kailu1835:

The employment rates are fixed.  When people are not collecting employment, they are not counted.  When people take early retirement because they can't find work, they are not counted.  When people stop looking and go on disability, they are not counted.  The actual employment rate is MUCH higher than what is touted around town.

Actually this was discussed on several news programs even Fox, and these are actual unemployment numbers because all that you stated was taken into consideration.


Well that is not what they said on their news program this morning, because I specifically went there to see what they would say, LOL.  Also, how can anyone say that if people decided they wanted to look for a job the unemployment rate would be____. How do they make that determination, how do they pull that one out their ass?


babiesbabybaby development

rocketracer
by Gold Member on Oct. 5, 2012 at 3:39 PM
2 moms liked this

Meet the Obama Donors at the BLS

 
bY:
October 5, 2012 1:28 pm

At least two economists at the Bureau of Labor Statistics (BLS) have contributed to President Barack Obama's campaign. Harley Frazis of Bethesda, MD, has contributed at least $2,000 to Obama and $9,000 to the Democratic National Convention over the last three election cycles.

Stephen Phillips of Washington, D.C., has contributed at least $270 to Obama during the 2012 cycle. According to his LinkedIn profile, Phillips served as an economist at BLS between June 2009 and July 2012. Phillips was responsible for examining the impact of Obamacare on Healthcare North American Industry Classification System indices.

erika9009
by Silver Member on Oct. 5, 2012 at 4:09 PM
3 moms liked this

I know, it's like this was scripted or something.

Oh wait, it was.  Rush did predict this.  Rush has his weirdness, but he called this out in Dec 2011.

Things are starting to look more and more fixed than real.

Quoting imamomzilla:

 Gee....what a coincidence. Obummer flubs the debate...unemployment numbers drop...just as the ocean's water recedes ;-)

Omm.


____________________________________________________

Erika..

Children are a blessing and are never inconvenient.............

mommom2000
by Bronze Member on Oct. 5, 2012 at 8:06 PM
1 mom liked this

LOL Look at people scrambling to dispute good news.  The republicans are sure mad finding excuses to discount this.  Like someone else pointed out this is the same board that was giving the rating under Reagan.  Now we have conspiracy theorist who want to deny it.  I find this very funny.  The republicans have been trying to make Obama fail since day one isn't  it obvious now how their pundits are handling good news.  Could you imagine what the numbers could have been without such obstruction.

LIMom1105
by on Oct. 5, 2012 at 8:38 PM
2 moms liked this
It's good news for our country, whether or not you want to hear it.
Carpy
by Platinum Member on Oct. 5, 2012 at 9:01 PM
2 moms liked this

And then there is this.


This morning's jobs report released by the Bureau of Labor Statistics is being met with skepticism. The report found that, from August to September, the unemployment rate dropped from just above 8 percent to 7.8 percent.

In fact, when Labor Secretary Hilda Solis appeared on CNBC this morning, the first two questions for her were whether the books have been cooked:  

Solis called the charges insulting and "ludicrous."

Douglas Holtz-Eakin, a former economics adviser to John McCain and the former head the Congressional Budget Office, calls the numbers "implausible."

"Sept. unemployment rate fell to 7.8 percent due to an extraordinary – but implausible – estimate of 873,000 #jobs in household survey,” said Holtz-Eakin on Twitter.

“The report presented a slew of contradictory data points, with the total employment level soaring despite the low net number,” said CNBC's Jeff Cox. 

The Washington Post's Neil Irwin adds, "Weird that payrolls are exactly on forecast but household survey is far better."

And the Wall Street Journal warns that these numbers should be taken "with a grain of salt."

"The big jump in the household survey is certainly a welcome sign. But take this data with a grain of salt, especially considering the volatile reputation this data point holds,” writes the Wall Street Journal.

"No way in the world these numbers are accurate," said Ed Butowsky of Chapwood Capital Investment on Fox Business. "Somebody needs to do an investigation. ... Investigate these numbers.

Carpy
by Platinum Member on Oct. 5, 2012 at 9:03 PM

Once their unemployment ends, they are dropped from the picture.

Quoting deepthinker:


Quoting kailu1835:

No they aren't, because when a ton of people left the job force, because of the reasons I mentioned, the unemployment rate went down, regardless of the fact that there were still so many people actually unemployed who would rather be employed.

http://www.foxbusiness.com/government/2012/10/05/real-unemployment-rate/print

Quoting deepthinker:


Quoting kailu1835:

The employment rates are fixed.  When people are not collecting employment, they are not counted.  When people take early retirement because they can't find work, they are not counted.  When people stop looking and go on disability, they are not counted.  The actual employment rate is MUCH higher than what is touted around town.

Actually this was discussed on several news programs even Fox, and these are actual unemployment numbers because all that you stated was taken into consideration.


Well that is not what they said on their news program this morning, because I specifically went there to see what they would say, LOL.  Also, how can anyone say that if people decided they wanted to look for a job the unemployment rate would be____. How do they make that determination, how do they pull that one out their ass?


Kathy489
by Bronze Member on Oct. 5, 2012 at 9:17 PM
3 moms liked this

 

Quoting erika9009:

I know, it's like this was scripted or something.

Oh wait, it was.  Rush did predict this.  Rush has his weirdness, but he called this out in Dec 2011.

Things are starting to look more and more fixed than real.

Quoting imamomzilla:

 Gee....what a coincidence. Obummer flubs the debate...unemployment numbers drop...just as the ocean's water recedes ;-)

Omm.

 

This is absolutely right:

From Today at Right Wing News

I've listened to Rush Limbaugh off and on for 20 years now. I agree with him on most things. I wish his personal life wasn't so dramatic and unfortunate, but no one can argue the fact that he is the best broadcaster out there, bar none.

Through the years I've always been amazed how right he was, and I'm not talking about issues or personal beliefs. I'm talking about predictions and the reasons behind political decisions. He warned us during the primaries that nominating anyone but a true conservative would be the wrong candidate. I didn't believe him. Like a lot of Republicans, I thought we needed a more moderate Republican. One who had compromised with the other side. One that would bring us the independents and moderate Democrats. I thought McCain fit that to a tee. And he did. But I was wrong, and Rush was right. When we stick to our ideals and principles, we win.

But for the last year Rush has been saying something about the Obama administration that I can't wrap my mind around. I just can't believe it could possibly be true. What is it? Well, if you have been listening to Rush you know.

He believes that the Obama administration is destroying the economy on purpose. On purpose. He says that the more people depend on the government, the more control the government has over the people and it's institutions. He says this plan is a way for Democrats to stay in power.....always.

 

gsprofval
by Gold Member on Oct. 5, 2012 at 9:17 PM

Business owners are not impressed and are still not going to expand very much:

Beyond The Numbers: American Employers Respond To The Jobs Report

AP

Today’s jobs numbers look better than many economists expected, but so far reaction is muted from businesses and industries that would hire more workers if they believed the economy was about to really start rocking.

Kennametal KMT +0.93%, Inc., a $3 billion Latrobe, Pa. industrial machinery company which has 13,000 workers worldwide, told the WSJ’s Clare Ansberry the company’s decision makers don’t really watch the monthly jobs figures. They’re focused on uncertainty about the U.S. election, leadership in China and the economic mess in Europe.

“The underlying fundamentals of the US economy are pretty good. It’s the uncertainty that’s hard,” the company said.

Still, Kennametal says it has more than 320 jobs open, more than half of those technical jobs ranging from engineers to machinists who can run computers. The company expects to have more openings  as baby boomers retire. But like many industrial employers, Kennametal says it is struggling to find applicants with the skills required.

AutoNation AN +0.41%, Inc., the largest auto retailer in the U.S., sees the recovery requiring three elements: Easier access to credit, a recovery in housing and stronger hiring. Credit has recovered, and housing prices are starting to rise, but so far employment growth – including September’s 114,000 new jobs, is anemic compared to the 23 million who don’t have a job, says company spokesman Marc Cannon. “A great deal of this lift came from part-time employment,” he said. The auto industry has, so far, been a bright spot in the economy, he says. But “now we need that third leg” of stronger employment.

Russ Klein, Chief Marketing Officer at Arby’s Restaurant Group Inc., told the WSJ’s Julie Jargon that the report “is one step in the right direction but not something the company will pivot off of in any of its decision making”. Instead, he said, it will keep targeting the budget-conscious consumers, because “the overall employment picture is still very challenging and we feel consumers are looking for a break and we do a lot of discounting.”

Mr. Klein says the company will begin testing a new “snack and save” value menu next month to be more responsive to consumers who remain under financial pressure.

Arby’s operates approximately 3,500 restaurants in the U.S., a number that is expected to remain the same for the next couple of years. “Arby’s has been a steady employer – we haven’t done any massive layoffs,” Mr. Klein says, adding that it hasn’t added many new jobs, either.

Separately, the Associated General Contractors of America, the trade group that represents builders, said the construction sector added 5,000 jobs last month, but cautioned the overall picture is still shaky.  Construction companies employ about 5.5 million people,the group said, down from 7.7 million six years ago before the housing bust.

“Despite the slight uptick in construction employment for the past month, the industry is a bit smaller than it was one year ago,” said Stephen E. Sandherr, the association’s chief executive officer. “It appears that for every rebounding market segment, there is another one that is shrinking.”


 

Quoting _Kissy_:


pj2becca21
by Bronze Member on Oct. 5, 2012 at 9:20 PM
1 mom liked this

I be happy when it is below 5% and i can get a full time job

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