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US jobless rate falls to 7.8 pct., 44-month low

WASHINGTON (AP) — The U.S. unemployment rate fell to 7.8 percent last month, dropping below 8 percent for the first time in nearly four years and giving President Barack Obama a potential boost with the election a month away.

The rate declined from 8.1 percent because the number of people who said they were employed soared by 873,000 — an encouraging sign for an economy that's been struggling to create enough jobs.

The number of unemployed Americans is now 12.1 million, the fewest since January 2009.

The Labor Department said employers added 114,000 jobs in September. It also said the economy created 86,000 more jobs in July and August than the department had initially estimated.

Wages rose in September. And more people started looking for work.

The revisions show employers added 146,000 jobs per month from July through September, up from 67,000 in the previous three months.

The 7.8 percent unemployment rate for September matches the rate in January 2009, when Obama took office. In the months after Obama's inauguration, the rate rose sharply and had topped 8 percent for 43 straight months.

The decline in the unemployment rate comes at a critical moment for Obama, who is coming off a weak debate performance this week against GOP challenger Mitt Romney.

The September employment report may be the last that might sway undecided voters. The October jobs report will be released only four days before Election Day.

Romney released a statement that focused on the job figures, which declined in September from August. He also noted that manufacturing has lost 600,000 jobs since Obama took office.

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

But Sal Guatieri, an economist at BMO Capital Markets, said the report signals improvement.

"An overall better-than-expected jobs report, consistent with most recent data that suggest the economy is gaining some momentum," Guatieri said in a note to clients. "The sizeable drop in the unemployment rate could lift the president's re-election chances following a post-debate dip."

Labor Secretary Hilda Solis was asked on CNBC about suspicions that the Obama administration might have skewed the jobs numbers to aid Obama's re-election prospects.

"I'm insulted when I hear that because we have a very professional civil service," Solis said. "I have the highest regard for our professionals that do the calculations at the (Bureau of Labor Statistics). They are trained economists."

After the jobs report was released, the Dow Jones industrial average gained 60 points in the first hour of trading. Broader stock indexes also rose.

The yield on the 10-year U.S. Treasury note climbed to 1.73 percent from 1.68 percent just before the report. That suggested that investors were more willing to take on risk and shift money from bonds into stocks.

The job market has been improving, sluggishly but steadily. Jobs have been added for 24 straight months. There are now 325,000 more than when Obama took office.

The number of employed Americans comes from a government survey of 60,000 households that determines the unemployment rate. The government asks a series of questions, by phone or in person. For example:

Do you own a business? Did you work for pay? If not, did you provide unpaid work for a family business or farm? (Those who did are considered employed.)

Afterward, the survey participants are asked whether they had a job and, if so, whether it was full or part time. The government's definition of unemployed is someone who's out of work and has actively looked for a job in the past four weeks.

The government also does a second survey of roughly 140,000 businesses to determine the number of jobs businesses created or lost.

The September job gains were led by the health care industry, which added 44,000 jobs — the most since February. Transportation and warehousing also showed large gains.

The revisions also showed that federal, state and local governments added 63,000 jobs in July and August, compared with earlier estimates that showed losses.

Still, many of the jobs the economy added last month were part time. The number of people with part-time jobs who wanted full-time work rose 7.5 percent to 8.6 million, the most since February 2009.

But overall, Friday's report dispelled some fears about the job market.

The "U.S. could be growing jobs at a marginally faster pace than feared mid-summer," Guy LeBas, a strategist at Janney Capital Markets, wrote in a research note. "Even with the issues in Europe and slowing production in China, U.S. economic activity does not look to be bearing the brunt of global downside, at least not anymore."

Comments

kevin 2 years, 2 months ago

I do not believe this for one single minute. Why don't you factor in the millions, another 7%, that gave up looking for work. This new "stat" only calculates the thousands being hired "part-time" for the holidays, after which, (after Jan, 2013), will be laid off and the unemployment rate jumping back up, unless we hire a new President in this country to get gets going. This news release is coming from Washington. I wonder how they fixed up this stat to report? This is only a temporary stat folks. Look around you and ask who is out of work and who is not. More and more are on extended unemployment benefits than ever. These are in the 47% that take and cannot give back for lack of jobs.

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JV 2 years, 2 months ago

Kevin is right and in addition, the jobs being created are low paying.

An August 2012 study by the liberal National Employment Law Project (NELP) finds that 58 percent of all jobs recovered in the last two years have been in low-wage occupations, which grew 2.7 times faster than mid-wage and higher-wage jobs. Other key findings included:

Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth.

Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth.

Higher-wage occupations were 19 percent of recession job losses, and 20 percent of recovery growth.

Three low-wage industries have added 1.7 million jobs in the recovery and constitute 43 percent of total net growth: food services, retail, and administrative, support and waste management services (largely employment services, i.e., temp jobs).

The study examined employment trends in 366 occupations using the government's wage and job survey, known as the Current Population Survey (CPS). "In short," concludes the report, "America's good jobs deficit continues."

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