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Unemployment dips below 8%

October 5, 2012

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WASHINGTON — The U.S. unemployment rate dropped below 8 percent for the first time since the month President Barack Obama took office, a surprising lift for both the economy and his re-election hopes in the final weeks of the campaign.

The rate, the most-watched measure of the country’s economic health, tumbled to 7.8 percent in September from 8.1 percent in August. It fell because a government survey of households found that 873,000 more people had jobs, the biggest jump since January 2003.

The government’s other monthly survey, of employers, showed they added a modest 114,000 jobs in September, but it also showed job growth in July and August was stronger than first thought.

Obama, eager to shift attention from a disappointing performance at the first presidential debate, said Friday that the report showed the country “has come too far to turn back now.”

His Republican opponent, Mitt Romney, countered: “This is not what a real recovery looks like.”

The drop brought the jobless rate back to where it was when Obama was sworn in, in January 2009, and snapped a 43-month streak in which unemployment was 8 percent or higher — a run Romney had been emphasizing.

The October jobs report comes out Nov. 2, four days before the election, so Friday’s report provided one of the final snapshots of the economy as undecided voters make up their minds.

The government calculates the unemployment rate by calling 60,000 households and asking whether the adults have jobs, and whether those who don’t are looking for work.

Those who do not have jobs and are looking are counted as unemployed. Those who aren’t looking are not considered part of the work force and aren’t counted as unemployed.

A separate monthly survey seeks information from 140,000 companies and government agencies that together employ about one in three nonfarm workers in the United States.

That survey found that the economy added 114,000 jobs in September, the fewest since June. Most of the job growth came in service businesses such as health care and restaurants.

The Labor Department raised its job-creation figures by a total of 86,000 jobs for July and August. The July figure was revised from 141,000 to 181,000, and the August figure from 96,000 to 142,000.

Taken together, the two surveys suggest the job situation in the United States is better than was thought.

Economist Joel Naroff, president of Naroff Economic Advisors, called the strong employment reports “a shocker” that showed the job market was sturdier than most economists had thought.

Financial markets seemed less impressed. The Dow Jones industrial average climbed as much as 86 points in early trading but drifted lower for most of the rest of the day. It finished up 34 points at 13,610. The Standard & Poor’s 500 index, a broader measure, was down a fraction of a point.

Stock indexes have been trading at or near their highest levels since December 2007, the month the Great Recession began. They have gotten a lift from Federal Reserve efforts to stimulate the economy, and by a European Central Bank plan to buy the bonds of financially troubled countries to ease a debt crisis there.

Comments

tbaker 2 years, 2 months ago

7.9% unemployment is BS.

They used the “household number” of 114,000 jobs being created in September. This is just a wild guess, and it won’t even keep up with the US birth rate, but let’s assume it’s true for sake of argument.

If you look at the U-6 number that counts everybody, people who have given up looking for a job and don't have one, in addition to people who are still looking for a job and don't have one, that number is still around 14.7%, and it has been that way for years.

The labor participation rate is what has changed. If the same number of jobs were available to be had today as when Obama was elected - and they had used that number for September’s calculation - the U3 unemployment (what is commonly cited) rate would be around 11% instead of this BS 7.9. number.

However, Team Obama now says there are 1.1 million fewer jobs to have (they have shrank the labor force). This is how you lower the percentage. You simply lower the number of people looking for work. The only way that 114,000 new jobs can lower the U3 unemployment rate is if people are not in the workforce by even greater numbers. If the labor market is shrinking (lower labor force participation rate) then “creating” 114,000 jobs makes the unemployment rate seem lower. Simple math.

With an election days away, who is surprised by these shenanigans?

Sharon Nottingham 2 years, 2 months ago

the number comes from the dept of labor and statistics and the numbers are not rigged from them. This is positive news. Have we become so skeptical that we cannot accept that maybe there is a light at the end of the tunnel? The dept. is not infiltrated by democrat and republican leaders so this number did not magically appear out of thin air.

Michael Pinegar 2 years, 2 months ago

Go ahead and live in the river of De Nile.

Keith 2 years, 2 months ago

I'm sorry you can't get the bad news you need to scare people into voting for your deeply flawed candidate.

beatrice 2 years, 2 months ago

You are correct, tb -- 7.9% is a bunch of bs!

The actual number is 7.8%.

Glad I could clear that up for you.

msezdsit 2 years, 2 months ago

blah blah blah. Obama isn't losing 600,000 jobs a month like Bush did and Romney will. I like the way all you right winger fanatics sit around hoping for bad news so you can feed your flawed ideology mill at the peril of the american people. Your grapes are mighty sour baker.

Curtis Martell 2 years, 2 months ago

Please stop with the dis-information. These are the same statistics that have been used for years. Yest they are not perfect but it is the best measure we have. Seems everyone believed the numbers from the BLS up untill the numbers this month. The bias in this case is on the part of the readers and the press who are questionion them, not the statistics.

CastleRock 2 years, 2 months ago

Just another piece of evidence that the economy continues to recover. What's the count up to now?....5,000,000 new private-sector jobs in the last 30 months with the addition of the 200,000 (September plus July/August revisions) new jobs in yesterday's report. Good news for President Obama.

Pretty impressive recovery considering the huge job loss from 2008/2009!

grammaddy 2 years, 2 months ago

You must be Republican if you can't enjoy the idea that unemployment dropped to the same level it was when Obama took office.We're not where we need to be, but at least we are not where we were.

tbaker 2 years, 2 months ago

Like I said Castle, it looks like they rigged the numbers. They used the “household survey” numbers of total employment which rose by 873,000 in September.

That’s the biggest one month jump in that number in 29 years - since June 1983. What other data corroborates and supports this rare event?

That’s why this is flakey. There is a huge divergence in the two surveys done by the Labor Department. The Household Survey shows a gain of 873,000 people employed in September - resulting in this surprise drop in the unemployment rate - while the Establishment Survey (the survey normally used to calculate U3 unemployment) only showed a rise of 114,000.

quik 2 years, 2 months ago

Does this mean that we're now counting drug dealers amongst the employed? Is that the big change?

lunacydetector 2 years, 2 months ago

if you believe unemployment dropped (the largest drop in 29 years), i have a bridge in brooklyn i'd like to sell you.

Jean Robart 2 years, 2 months ago

To be fair, Obama DID say the numbers would go down. However, he did not say that the numbers of unemployed wouldn't go down till just a few weeks before the election, after he screwed up in the first debate.

tomatogrower 2 years, 2 months ago

Agreed. I can't think of anyone I know who doesn't have a job. I know a few who don't have the job they for which they trained, and would like to find something in their field, but they have a job. They go shopping still. They are doing just fine.

SnakeFist 2 years, 2 months ago

But being on food stamps doesn't necessarily mean not having a job. When I was in the Army, for example, every enlisted person below E6 (and some above that) with at least one child qualified for food stamps.

grammaddy 2 years, 2 months ago

Not true.But keep repeating the lie.Eventually someone might believe it.

grammaddy 2 years, 2 months ago

Even bigger surprise-neither are you.Just because you say it does not make it fact.You must be involved in one of the agencies' work programs or you get nada.Obama did NOT remove the work requirements. He simply allowed States to make their own rules concerning them, and they must be able to prove that those other options will reduce the number on the welfare rolls by 20%.Been there, worked there.

SnakeFist 2 years, 2 months ago

Isn't it funny how conservatives were fine with how unemployment was calculated until Obama took office, and now they introduce factors like "labor participation rates" and "alien abduction rates". Maybe we should re-calculate unemployment under Bush using these new factors so we have a better idea of what Obama started with.

Does anyone without a tinfoil hat really believe that, as Liberty_One asserts, 22% - more than 1 in 5 - people are out of work (or, as he has asserted in the past, that unfunded liabilities now top 222 trillion)? The conservative perspective is a sad and cynical one.

Ribs61 2 years, 2 months ago

I don't know anything about unemployment numbers, other than both parties manipulate the numbers to the own purposes.

I do know the Congressional Budget Office is non-partisan and the numbers Liberty_one sites are accurate. Not everything in the forecast will necessarily come true but it is the direction we are heading with total spending. As an example, there could be many (think thousands) of elderly people pass away earlier than normal life expectancy, which would decrease anticipated expenditures in both medicare and social security. Those programs are not sufficiently funded for the promised benefits.

BigAl 2 years, 2 months ago

Great post. I bet some of these fine conspiracy folks are also "birthers".

SnakeFist 2 years, 2 months ago

For the record, Liberty_One asserted unemployment is "up past 22% now". Unemployment during the worst days of the Great Depression was approximately 25%.

tomatogrower 2 years, 2 months ago

It was found that 50% were either unemployed or underemployed. Underemployed means that they are not working in their field of study, or they aren't getting paid very well in the new entry level. It does not mean that they are unemployed. Of course, they could borrow money from Mum and Dadykins and start their own business.

I mean the 1% have to have educated service workers don't they? They get tired of being waited at restaurants by poor uneducated trash. And they need college grads to nanny their children (should read, raise their status icons). Have a little sympathy for those poor billionaires.

Liberty, I run a business and the new paradigm in the business world is to try to do the same work with as few people as possible. Preferably with no employees at all, no matter the lowering of quality and customer service. I've seen businesses change to that thinking all of the time. I know several managers and owners who look down on their workers and just consider them a deficit that can be replaced any time. They love the high unemployment rate. They can hire much cheaper labor now.

question4u 2 years, 2 months ago

Where in the country is there anyone who is saying, "I was perfectly neutral until I heard one side declare a conspiracy when information issued by the US government was not what they wanted to hear, and I'm sure that I can believe their accusations because they're clearly not biased"? The louder conspiracy touters howl the less credible they will sound to anyone who truly hasn't made up his or her mind. It's not as though the birther issue hasn't created a track record. What is a truly undecided voter more likely to believe: two government surveys that BOTH show drops in unemployment or the conspiracy theories of people who are as partisan as they come? If you believe that it's the latter, you've already bought the Brooklyn Bridge. Debate outcomes might have an influence, but whining about conspiracy over unemployment numbers is more likely to backfire than to sway any undecided voters. As for the rest it would take an event proportionate to an atomic blast to move them one way or the other.

tbaker 2 years, 2 months ago

The Labor Department reported the “household survey” numbers of total employment rose by 873,000 in September.

That’s the biggest one month jump in that number in 29 years - since June 1983.

I have a question4u: What other data corroborates and supports this rare event?

Armstrong 2 years, 2 months ago

The U-6 has unemployment at about 14.7 % Those damned munbers are killin ya Barry

Armstrong 2 years, 2 months ago

What does that have to do with Barry's unemployment numbers. Not one lib can debunk this 14.7 % number -

Not one of you.

And I know why

Armstrong 2 years, 2 months ago

If you like the econimic model of Greece and Spain Barry is the guy to do it. Barry is too inept to run our country. The last 4 years of failure should prove that fact on numerous levels.

Armstrong 2 years, 2 months ago

How do you think the banks got "weak" in the first place ? Do you have any basic knowledge of the economy over there ? Do you have any basic knowledge of what started the decline of Greece and Spain ? Do you have any basic knowledge of our economy mimicing those models? Didn't think so

jafs 2 years, 2 months ago

Something about that doesn't seem quite right to me.

The article says that over 800,000 people more had jobs, not that they hadn't lost theirs yet.

I don't understand the vast divide between that number and the number of new jobs.

jafs 2 years, 2 months ago

Nice analogy.

But, it doesn't fit with the statement that 800,000 more people have jobs.

That means that 800,000 people more have jobs this month than last month, not that 400,000 people kept their jobs, right?

I agree that lessening the folks losing their jobs is a positive thing, and part of the solution, along with new ones, but that's not how this was presented in the article.

jafs 2 years, 2 months ago

Same thing really.

If it were only a case of not losing your job, you wouldn't count all of those people in the 800,000 figure.

Say I have a job in August, and I don't lose it - that wouldn't count towards more people employed in September than August, since I was employed in both months.

In order to have more people employed, more people have to get jobs, not just keep theirs.

From the article "873,000 more people had jobs in September".

jafs 2 years, 2 months ago

Ok - let's try to think this through together.

Given your numbers, we have more people getting new jobs than shows up in the employment figures, right?

In your 3 month example, 35 people have new jobs (11+12+12), but the increase in employment is only 9 (109-100).

The figures in the article show the exact opposite - we only have about 100K new jobs, but 800K more people employed, which doesn't make sense.

It would make more sense if the number of new jobs was higher than the employment jump.

Keeping one's job doesn't count towards more people employed - what counts is new jobs, offset a bit by newly unemployed folks.

Best case scenario - nobody loses their jobs at all. Then the number of people employed will rise at exactly the number of new jobs, with no unemployment offset. But, there's no reasonable way that the number of people newly employed can possibly be greater than the number of new jobs.

beatrice 2 years, 2 months ago

Well now I'm convinced. A few anonymous people who regularly bash President Obama say that the numbers from the Labor Department are false and the numbers were somehow rigged. I mean, why should I doubt their claims over the Labor Department?

Seriously, unemployment could be at 3% and some people would still hate Obama.

Oh well.

Come Nov. 7, I suspect we will be reading about how the voting numbers were also falsified.

Oh well.

Armstrong 2 years, 2 months ago

"Come Nov. 7, I suspect we will be reading about how the voting numbers were also falsified." - By the left

Pastor_Bedtime 2 years, 2 months ago

Good. So not a peep out of you about voter fraud when Obama wins? I'll quote you on that then.

beatrice 2 years, 2 months ago

You think the Left are going to be arguing that Obama's win was even bigger?

That doesn't make sense.

beatrice 2 years, 2 months ago

Because it is the same institution that has been putting out numbers all along, including when it was above 9%. That is why. This sudden distrust from some is nothing but partisan rantings. If the numbers had said the unemployement numbers had gone up, think those same people would be questioning their methodology?

Armstrong 2 years, 2 months ago

Prediction: As seasonal hiring begins for the Christmas holiday season Barry will be given credit for dropping the unemployment rate yet again " We will be on the brink of prosperity " unfortunately that only lasts until January like the last 4 years

beatrice 2 years, 2 months ago

Again, you are dead wrong.

It was at 9.9% in Dec. 2009 and fell to 9.7 in Jan. 2010, 9.4 in Dec. 2010 and 9.1 in Jan. 2011, and 8.5 in Dec. 2011 with the number being 8.3 in Jan. 2012? http://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_&met_y=unemployment_rate&idim=country:US&fdim_y=seasonality:S&dl=en&hl=en&q=unemployment+rate

You really are bad at this who numbers thing.

grammaddy 2 years, 2 months ago

World Leader in what? Prison population? Homelessness? Number of ididots still spouting"Greatest Nation in the World?" Polluters? Amount we spend on war instead of education or healthcare?

yourworstnightmare 2 years, 2 months ago

This is not what a real recovery looks like? Oh, Moderate Mitt must mean unemplyment and the economy in a real recovery just get better overnight. Now that would be real.

Look, the economy is clearly improving because of Obama's (and Bush's) policies. It is slow, and it may never fuller recover to look exactly like it did before, but to deny it is getting better is like clicking the heels of your ruby slippers together.

Add this to the list of Obama accomplishments.

James Minor 2 years, 2 months ago

Whether the unemployment rate appears unbelievable. The numbers are reported the same as when Reagan, Bush1 and Bush2 were in office. At least Obama is not waiving the victory flag yet. He is saying there is a lot of work left to do. Reagan, Bush1 and Bush2, would have been dancing in the street and taking all the credit. When Bush2 was in office anytime the unemployment rate came out showed an increase, they pointed the attention to the war in Iraq. Bush2 should have taken less time reading 1984 and more time on reading something that would have improved the economy. Hopefully, everyone won't see the unemployment as a negative and vote for Mitt the Switch!!!

verity 2 years, 2 months ago

Romney has changed his political ideology in order to get elected. Do you really trust him to be a moderate as president? He chose Ryan, who is hard right, to be, as they say, a heartbeat away from the presidency. That alone would keep me from voting for him---not that I would anyway for any number of reasons, one being his entire lack of empathy for those not born with a silver spoon.

Of course, as you say, it really doesn't matter in Kansas.

deec 2 years, 2 months ago

Stagnant wages, underemployment and an aging population contribute to the rise in food stamp applicants. So do illicit foreclosures and the rise in homelessness. Child support evaders contribute. Disability eligibility may reflect an aging population, and so might the vast number of war veterans who do not receive adequate care when discharged.

Kat Christian 2 years, 2 months ago

VOTE Barak Obama for re-election. He's the better of the two evils. Romney becomes President we all just better bend over and kiss our cans good-bye because none of use (except the already rich) won't have a pot to pee in. Say good-bye to Middle Class America. At least we'd have some semblance of that to hold onto with Obama in office.

jafs 2 years, 2 months ago

And yet, it's still the better choice, if those are the options.

I prefer to say he's the relatively better of two candidates, neither of whom is completely satisfying.

Carol Bowen 2 years, 2 months ago

Liberty, Regardless of the scale used, a comparison can be made. The point to be made is that in 2008, unemployment was increasing. In 2012, unemployment is decreasing. A little casual calculus. Which would we rather have? An increasing rate or a decreasing rate.

By the way, I really appreciated Rand Paul's position on foreign wars. http://www.cnn.com/2012/10/10/opinion/rand-paul-romney-foreign-policy/ I think there's room for agreement across the aisle on this.

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