U.S. Jobless Rate Falls to 7.8%

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.

"An overall better-than-expected jobs report, consistent with most recent data that suggest the economy is gaining some momentum," said Sal Guatieri, an economist at BMO Capital Markets, in a note to clients. "The sizable drop in the unemployment rate could lift the president's reelection chances following a post-debate dip."

Stock futures rose modestly after the report. Dow Jones industrial average futures, up 30 points just before the report came out, were up 45 points after it was released.

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.

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Read/Post Comments (14) | Recommend This Article (2)

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  • Report this Comment On October 05, 2012, at 9:58 AM, plange01 wrote:

    perfect timing? or is obama going to wind up in jail?no no gets that lucky so jail it is!

  • Report this Comment On October 05, 2012, at 12:25 PM, CrankyTexan wrote:

    Bragging about a "tumble" to 7.8% unemployment is like bragging about a D minus on a report card.

  • Report this Comment On October 05, 2012, at 1:19 PM, DoctorLewis4 wrote:

    Gee, it seems like some of you are disappointed that things are getting better. Sorry about that - and BTW the stock market seems to be doing just fine lately.

  • Report this Comment On October 05, 2012, at 1:28 PM, CrankyTexan wrote:

    7.8% is not better. Especially when you consider the people who dropped out of the workforce.

    This country is serious financial trouble.

  • Report this Comment On October 06, 2012, at 1:04 AM, JULPAC wrote:

    hahaha - this is just too ridiculously, coincidentaly good for Obama - especially after a horrible, horrible debate performance.

    Someone from Fool please answer this question & maybe I'll start believing the hoopla:

    What was the total percentage of people working in the US under Bush?

    And then, what is the total percentage of people working under Obama?

    Once you have this number ADD it to the unemployment numbers...

    Also, is possible, (because I love debates) would the writer of this article please respond to this article from AmericanThinker.

    Your answer may potentially sway an independent voter.

    http://www.americanthinker.com/2012/09/should_mitt_hire_jay_...

  • Report this Comment On October 06, 2012, at 8:28 AM, TMFMorgan wrote:

    Julpac,

    Not all of those who dropped out of the labor force are "unemployed." Many are pre-65 retirees and young persons in school. The BLS asks those not in the labor force whether or not they want a job. I wrote a few months ago:

    "Even though the number of Americans not in the labor force has increased by more than 10 million since 2007, those who left the labor force and claim to want a job has increased one-fifth that amount; 2 million. In the last year, the number of Americans age 16 and up not in the labor force increased by 2.7 million, yet those claiming to want a job declined by 140,000. "

    Yes, there are drop outs who simply gave up. But just adding the change in the emp-pop ration to unemployment doesn't make sense.

  • Report this Comment On October 06, 2012, at 8:34 AM, xxbrainxx wrote:

    Bernanke said the 40 billion a month until the jobless rate reached 7.8. I guess that only took one month.

  • Report this Comment On October 06, 2012, at 8:47 AM, TMFMorgan wrote:

    ^ When did he say that?

  • Report this Comment On October 06, 2012, at 9:49 AM, shartuga wrote:

    By the end of the day the market remained unconvinced and seemed to say "meh".

  • Report this Comment On October 06, 2012, at 3:55 PM, JULPAC wrote:

    hmm very good response Morgan. I appreciate the time you took to answer my question.

    But here's another question - From the population of people who just gave up & did not try to go back into the labor force, how many of them sought an entitlement program?

    If this portion of the unemployed population shouldn't be added to the U3 because they willfully decided to drop out, then why would they pursue government programs?

  • Report this Comment On October 07, 2012, at 4:27 AM, mhonarvar wrote:

    "What was the total percentage of people working in the US under Bush?"

    are you including the thousands of sub-prime mortgage "brokers"?

    what about the thousands of house flippers that thrived on the rising house prices...and all those who sold stuff to these people.

    in 2005 homeowners extracted $750 billion of equity from their homes (up from $106 billion in 1996), spending two thirds of it on personal consumption, home improvements, and credit card debt (http://www.federalreserve.gov/pubs/feds/2007/200720/200720pa...

    The source of all that money came to a halt with the crash.

  • Report this Comment On October 07, 2012, at 11:40 AM, plange01 wrote:

    if obama's job numbers are true expect to see great fourth quarter earnings despite terrible expectations...we will start seeing who is lying this coming week!

  • Report this Comment On October 07, 2012, at 2:51 PM, Darwood11 wrote:

    I prefer to use the U6 unemployment rate. This shows the current unemployment rate to be more than 14%. However, as this number is always greater than the U3 number, it's essential to look at the trends.

    I prefer charts trending both the U3 and U6 numbers.

    The Obama administration predictions with the stimulus was that by now the U3 rate would be about 5.6% and falling. that rate is currently at 7.8% per the most recent statistics. I expect these too will be corrected next month.

    I suppose the good news is that the trend in "food stamps" SNAP program has more or less peaked in August 2011 at 46 million on food assistance. It has flatlined since then and remains at 46.4 million. The U.S. Department of Agriculture ran radio ads for about 6 months earlier this year to further explain the program amid a concern that more people should be signed up, but don't understand the program. .

  • Report this Comment On October 11, 2012, at 3:23 PM, QuarkHadron wrote:

    And.... now the truth:

    "Last week’s initial claims were revised up to 369,000, and indeed, as we’ve noted before, the claims numbers have been getting revised higher by a few thousand every week for more than a year now. "

    "We already seen several attempts at figuring out how much of this morning’s drop was due to this technical glitch caused by one unnamed “large” state that didn’t provide all the data. Peter Boockvar over at Miller Tabak said he talked to the Labor Department and was told the state in question caused a 30,000 drop. "

    "We’ve long said that what’s even more important than the number of jobs created is the kinds of jobs being created, and the wages they pay. That’s the trend that really matters. When you start to see jobs that pay good wages, living wages, then you’ll know the economy is strong.

    Don’t hold your breath."

    Quoted from the WSJ: http://blogs.wsj.com/marketbeat/2012/10/11/forget-political-...

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