U.S. jobless rates lowest since 2009

Unemployment by the numbers:

The national unemployment rate fell below 8 percent last month for the first time in nearly four years, surprising many analysts who had expected the rate to remain stable or inch up slightly and igniting fierce debate over the economic health of the country.

September’s jobless rate dropped to 7.8 percent from 8.1 percent in August, and total nonfarm employment rose by 114,000, the U.S. Bureau of Labor Statistics reported Friday. Jobs figures for July and August were adjusted up by 86,000, bringing the year’s average monthly gains to 146,000.

That’s enough to accommodate growth in the working age population, but the number of jobs added each month would have to be nearly twice the current level to rapidly bring down unemployment to pre-recession levels, experts say.

“The bottom line is we’re still treading water,” said Greg Lawson, a policy analyst with the conservative Buckeye Institute for Public Policy Solutions in Columbus. “Is there growth, sure. But let’s be real. The growth is limited, and it’s not blowing anybody’s socks off.”

The federal jobs report’s impact on the presidential race between President Barack Obama and his Republican challenger Mitt Romney remains to be seen, but several local residents said they’ve already made up their minds.

“It’s certainly a move in the right direction, (but) the unemployment rate will not affect my vote, ” said Middletown retiree Jim Kramer, who plans to vote for Romney.

Kathy Smith of Hamilton, also retired and a clear Obama supporter with a Bichon named Barack, said: “Seeing that the jobless rate has gone down gives us hope. Just seeing the economy turn around, whether it’s slow or fast, is very heartening to me.”

Candidates spar over rate

Obama touted declining unemployment — including Ohio’s jobless rate of 7.2 percent — as proof the economy is heading in the right direction and tried to leverage the jobs numbers to rev up voters after a lackluster performance in the first presidential debate Wednesday.

The Romney campaign said the jobs report showed how slowly the job market is recovering and questioned the veracity of the unemployment figures. Several Republican surrogates, including Rep. Allen West, R-Fla., even accused the Department of Labor of manipulating the numbers to favor Obama, an accusation the government flatly denied.

“This is the silly season (in politics), so different people are going to be running around saying this is the best thing ever or this is completely erroneous or conspiratorial,” Lawson said. “I think it’s safe to say you can be cautiously positive about the (unemployment) number.”

But the unemployment rate should not be regarded as a hard-and-fast number, Lawson said, because of the statistical anomalies inherent in the two separate surveys the government uses to determine the unemployment rate and the jobs figure.

The unemployment rate is extrapolated from a monthly household survey of about 60,000 households that covers a small fraction of the total employed population, while the jobs figure comes from an establishment survey of more than 486,000 businesses.

Lawson said sample sizes make the establishment survey much more reliable, but both surveys are highly volatile and subject to revision, making it dangerous to read too much into one month’s numbers, he said.

“When they (government) come out next month with this month’s number they may adjust today’s number as well, just like they did last month,” Dawson said.

Still, Friday’s report showed a silver lining in the labor market that was not readily apparent in the headline unemployment number, said Bill LaFayette, a labor market economist at Regionomics in Columbus.

“What I found really interesting about this month’s unemployment rate is that it went down below 8 percent despite a pretty healthy increase in the labor force,” LaFayette said. “But that’s exactly what you want.”

The civilian labor force grew by 418,000 last month after several months of contraction, and total employment increased by 873,000 — the biggest jump since 2003. That means unemployment fell not because the labor force shrank and fewer people were counted as unemployed, but because more people found work.

Joblessness declines

That helped drive down the number of unemployed by 456,000 to 12.1 million — the lowest level since Obama took office in January 2009, according to the BLS.

“The increase in employment was just enormous; about eight times the increase in the number of jobs,” LaFayette noted. “That number is probably high, but it also means the increase in the number of jobs was probably bigger than what was reported. My guess is they’re going to revise that number upward, too.”

Romney continued to argue Friday that the unemployment rate is skewed, because it does not include people who have given up looking for work, which he said would bring the rate closer to 11 percent.

LaFayette said Romney’s claims are misleading.

“He (Romney) is comparing baseballs and Buicks,” LaFayette said. “He’s referring to a fundamentally different way of getting at the unemployment number than the way it has been reported for the past several decades.”

While adding so-called discouraged workers would boost the current unemployment rate, the same measure would also have pumped up the rate before the recession began, he said: “There’s a whole range of broader measures you can use for unemployment, but they’re not the same as the reported unemployment rate.”

On an industry basis, health care added 44,000 jobs last month, more than twice as many as any other sector. Those jobs included 30,000 positions in health care services and 8,000 at hospitals.

Transportation and warehousing grew by 17,000 jobs, while financial services added 13,000.

Government payrolls also grew by 10,000 jobs last month after months of decline.