Big Drop In Unemployment Rate, Though Only 114,000 New Jobs

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The unemployment rate in the U.S. fell to 7.8 percent in September, the first time it has been below 8 percent since January 2009. The sharp decrease comes even as the government reported an expected, but less-than-robust 114,000 new jobs were created during the month.

However, this morning’s jobs report from the U.S. Labor Department also added 86,000 to the initial jobs counts reported for July and August.

Economists had expected the unemployment rate to rise, so the reduction came as a surprise, particularly since it was the result of more people working.

The U.S. Bureau of Labor Statistics said 873,000 workers got jobs during September, the first significant increase in three months. Many of them took part-time work, which helped push the number of people working part-time because they can’t find full-time work up by almost 600,000 in September to 8.6 million.

However, the number of workers participating in the labor force was unchanged during the month, meaning the decline in the unemployment rate was due to more people working, rather than a smaller overall workforce.

Because different surveys are used by the Bureau of Labor Statistics to calculate employment and job growth, the two numbers, though related, don’t correlate directly in any one month.

The number of unemployed Americans declined by 456,000 to 12.1 million. A year ago it was 13.9 million. Another 2.5 million are out of work, but not officially counted as unemployed. When these numbers are considered, along with the part-timers who want full-time work, the unemployment/underemployment rate is at 14.7 percent.

Private sector employers, meanwhile, reported creating 104,000 non-farm jobs on a seasonally adjusted basis last month; state governments added 10,000, one of the few times in the last several years there was an increase in government hiring. (There was an increase of 45,000 government jobs in August.) Most of the new jobs came in education. Economists expected the private sector to add about 130,000 jobs. ADP reported Wednesday that its count of private, non-farm jobs showed a September increase of 162,000.

All the job gains came in the service sector, which added 114,000 jobs overall. Manufacturing, which had been adding jobs, took a big hit during the month, declining by 16,000. About a third of the loss came from cuts in computer and electronic products manufacturing. Construction added 5,000 positions.

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The big gainers were healthcare, which added 44,500 jobs, with 29,500 of them coming from increases in doctor’s offices, outpatient care centers, and home health care. Food services and bars also added big, growing by 15,700 jobs.

Transportation and warehousing jobs increased by 17,100, as transit and group passenger services added 9,200 jobs and warehousing and storage added 4,300.

The financial sector also was hiring, increasing its overall workforce by 13,000 workers, with more than half the jobs — 8,100 — coming in the real estate.

Average earnings rose by seven cents to $23.58 an hour, while the average workweek edged up by 0.1 hour to 34.5 hours in September.

To the north, Canadian employment numbers, also released this morning, took a big jump adding 52,000 workers to the economy there. The increase was five times what economists had forecast, Bloomberg reported.

John Zappe is the editor of and a contributing editor of John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.


9 Comments on “Big Drop In Unemployment Rate, Though Only 114,000 New Jobs

  1. Hmmm. Seems like there arelots of a couple of ways to lower the UE rate without actually creating FT jobs.
    1) Get lots of people to give up looking (like last month).
    2) Get lots of people to take PT work, even though they’d prefer FT work (this month).


  2. Yes, the other way is to massage the numbers until they bleed.

    If you think the UE really went down, I have a bridge to sell you. Call fast for best price.

  3. Howard is that bridge for sale because the data does not fit your political views? Does the WSJ work, or do you only take your information from party outlets ?


  4. Hello Martin:

    I never express my political views here.

    I simply do not believe a word of it.

    Crushing debate and a few days later, the UL falls. You know what they say about numbers Martin. We will never know but I simply do not believe it.

  5. Howard a blithe willingness to delegitimize the government (the BLS in this case) helps make the nation less governable.

    Jack Welch just damaged his reputation for doing so….political opposition is one thing, but believing the numbers when you like them and knocking them when you don’t is another, and hoping for bad things to happen to the nation so your side can gain power is yet another thing….

  6. Hello Martin:

    As a country, we are becoming less governable because those who we elect are rich, corrupt, detached and at war with one another.

    On another note, questioning numbers will not sink our country but failing to do will almost certainly not do any of us any good. I do not accept the numbers I do not like. I question all of the numbers. Surely you see the poor judgment of simply accepting the numbers as gospel.

  7. Howard like anything, there needs to be balance. Of course numbers (facts in general) need to be carefully vetted and well understood.

    I find the timing of this sudden interest/concern in integrity of the BLS at least as suspicious as the timing of the 7.8% finding.

    For all these lo many years, the exact methods have been fine, as imperfect as they are, for all sides. Thats what the Wall Street Journal reported.

    Again, the blithe delegitimizing of the BLS stands directly in line with ANY reality that the right does not find politically suitable, and it’s a reckless, dangerous thing to do. Jack Welch will pay in reputation for years for doing it- regardless of which side wins Nov 6.

    And of the unelected rich, corrupt, and detached? A bigger issue ?

  8. Martin:
    I am not delegitimizing the BLS. I am simply very suspect of this information. Surely just as we learned that no business is too big to fail, we must now see that no institution is above careful and definitive examination. It is not as it appears; I am not a Repub who sees the numbers as out of alignment and therefore says it is a lie. I am simply astonished at the timing of this event.
    I am also not sure of the intent or the insight Welsh has but if Obama can make this country hum as Welsh did with GE back in the day, I will certainly be the first to give him all of the credit he deserves.
    So let me say what needs to be said. If Obama spends the next 4 years getting the results he got in the last 4 years, can you even imagine the human toll and catastrophe that the Repubs will inherit in 2016? Can you imagine them also failing and the blame game goes on and on? I do not care about either party or either set of beliefs. I see my country diminishing and as an over the top jingoist, if it is possible to fix it, I want that to be done.

  9. This only means that a lot of people’s unemployment benefits just ran out. I imagine that for the period since 2008 – if you compare drops in unemployment to home foreclosures, adjusting for the time-lag involved in a foreclosure, you could create matching line charts.

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