Unemployment rate drops to 7.8 percent as employers add 114,000 jobs in September
WASHINGTON – The unemployment rate fell to 7.8 percent last month, the first time in nearly four years it fell below a critical 8 percent threshold, providing President Obama a lift a month before the election.
Employers added 114,000 jobs to the US economy in September, with wages rising and more people starting to again look for work. The Labor Department also revised earlier estimates for July and August, saying that the economy added 86,000 more jobs than the preliminary figures suggested.
There are 12.1 million Americans now unemployed, the fewest since January 2009.
The jobs report is being closely watched, coming about a month before the election and 36 hours after the first presidential debate. The report could provide a boost to President Obama, who has been trying to convey to voters that his economic policies are working and who had a lackluster debate preformance on Wednesday night.
It could also make Republican presidential nominee Mitt Romney’s case more difficult. Still, the rate is higher than it has been when any president has been reelected since Franklin Delano Roosevelt.
The president hailed the news. “This morning we found out the unemployment rate has fallen to its lowest rate since I took office -- more Americans entered the workforce, more people are getting jobs,” Obama said at a rally at George Mason University in Fairfax, Va.
“We made too much progress to return to the policies that led to the crisis in the first place,” he added. “I can’t allow that to happen, I won’t allow that to happen.”
But the unemployment rate -- which was 8.1 percent in August -- has not been below 8 percent in three years, since before Obama took office.
“This is not what a real recovery looks like,” Romney said in a statement after the report came out. “If not for all the people who have simply dropped out of the labor force, the real unemployment rate would be closer to 11 percent.”
Romney noted the number of Americans still looking for work, living in poverty, or dependent on food stamps.
“The choice for this election is clear,” he said. “Under President Obama, we’ll get another four years like the last four years. If I’m elected, we will have a real recovery with pro-growth policies that will create 12 million new jobs and rising incomes for everyone.”
While analysts in past months have said the unemployment rate was dropping because people had stopped seeking work, that doesn’t appear to have been the case in September. According to the report, there were 802,000 people who are not looking for work any longer because they believe no jobs are available for them, a decline of 235,000 from a year earlier.
Economists have projected that 12 million new jobs will be added over the next four years if the economy stays on its current trajectory.
Some quickly questioned the accuracy of the jobs numbers, saying they were skewed to help President Obama’s reelection campaign.
“Unbelievable jobs numbers,” Jack Welch, the former head of General Electric, wrote this morning on Twitter. “These Chicago guys will do anything ... can’t debate so change numbers.”
Labor Secretary Hilda Solis said on CNBC that there was no way the numbers were cooked.
“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.’’
The monthly jobs report comes from a government survey of 60,000 households, where a series of questions are asked about whether they are employed, whether they work full or part time, and whether they own a business themselves. Those who are out of work and have been actively looking for a job in the previous four weeks are considered by the government to be unemployed.
The Obama administration focused on the positive aspects of the report, saying that the president’s policies are working and should be given more time.
“While there is more work that remains to be done, today’s employment report provides further evidence that the US economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression,” Alan B. Krueger, chairman of the Council of Economic Advisers, said in a statement.
House Speaker John Boehner acknowledged that “there is positive news in today’s report,” but added that “job creation is far too slow and the unemployment rate is far too high.”
Senate Majority Leader Harry Reid countered by saying, “We still have a lot of work to do, but with unemployment dropping below 8 percent to the lowest level in four years, our economy is on the right track.”
The jobs report, released at 8:30 on Friday morning in what has become a monthly ritual for not only for Wall Street but for political offices in Washington as well, showed that most of the gains were in the health care industry, where 44,000 jobs were added. Transportation, warehousing, and financial industries also showed gains.
Manufacturing, on the other hand, fell by 16,000 jobs. In addition, many of the jobs that were added came from part-time jobs. There are now 8.6 million people who are working part time jobs but want to be full-time, an increase of 7.5 percent in September.
The preliminary jobs figures for July and August were also revised upward, with 181,000 jobs added in July, 40,000 more than initial estimates, and 142,000 added in August, 46,000 more than initial estimates.
There is one more jobs report before the election, coming just four days before voters head to the polls Nov. 6.Matt Viser can be reached at email@example.com.