By Tim McLaughlin, Sr. Vice President, Weichert Financial
The unemployment rate in the U.S. unexpectedly fell to 7.8 percent in September, the lowest since January 2009, as employers took on more part-time workers.
The economy added 114,000 workers last month after a revised 142,000 gain in August that was more than initially estimated, Labor Department figures showed today in Washington. The jobless rate dropped from 8.1 percent, and hourly earnings climbed more than forecast.
“We’re seeing some firming in the labor market,” said Dean Maki, New York-based chief U.S. economist at Barclays Plc. “It’s still not booming or extraordinarily robust, but it is a labor market that we expect to continue to be firm enough to push the unemployment rate lower.”
Unemployment had been higher than 8 percent since February 2009, the longest stretch since monthly jobless figures were first compiled in 1948. The 7.8 percent matches the January 2009 figure.
Only one president, Ronald Reagan, has been re-elected since World War II with unemployment above 6 percent. On Election Day 1984, the rate was at 7.2 percent, having fallen almost three percentage points in the previous 18 months.
“This is not what a real recovery looks like,” the former Massachusetts governor said in a statement. “We created fewer jobs in September than in August, and fewer jobs in August than in July.”
The unemployment rate, derived from a separate survey of households, was forecast to rise to 8.2 percent, according to the survey median. Estimates ranged from 8 percent to 8.3 percent.
The unemployment rate and the number of jobs are obtained from separate surveys and don’t always align to convey the same picture of the labor market. That was the case this month. Overall, the report suggested the labor market, while stronger than it was during the spring, may still be gathering steam. The big drop in the jobless rate was in part due to workers settling for part time jobs because they couldn’t find full time work, which tends to skew the numbers. Also, prospective workers dropping out of the work force could impair the data as well.