Unemployment Rate Drops: What You Need to Know
The unemployment rate has reached its lowest level since January 2009. Here's some detail behind the headline figure to help you determine what it means for you.
The September jobs numbers from the Bureau of Labor Statistics came out this morning — and these numbers could have a huge influence on next month’s election. How does this matter to you or your association? Here’s a quick breakdown:
The good news
There’s a lot of that this month — with the jobless rate falling below 8 percent for the first time since January 2009 and an increase in nonfarm job creation by 114,000. Revised numbers from July and August also showed improvements, with 86,000 new jobs added during those months — on top of their prior totals.
A separate report, the household employment survey [pdf], which gathers its data differently from the more-well-known payroll survey, also showed a notable jump: Households reported an increase in jobs by 873,000 last month, the highest such monthly increase since 1983. And better, more people entered the job market last month — 418,000 in total — than in prior months, which bodes well for the nature of the economic improvement.
Many financial analysts reacted positively to the news.
The news, overall, is good for the Obama administration, which has dealt with an unemployment rate above 8 percent for nearly the entire period the president has been in office. “While there is more work that remains to be done,” said Alan B. Krueger, the chairman of the Council of Economic Advisers, “today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression.”
The bad news
By historical standards, a 7.8 percent unemployment rate is still fairly high — many economists consider 6 percent “full employment.” And more than half of the employment gains were part-time jobs, not full time.
Presidential candidate Mitt Romney tried to make this point clear in a statement. “This is not what a real recovery looks like,” he said this morning. “We created fewer jobs in September than in August, and fewer jobs in August than in July, and we’ve lost over 600,000 manufacturing jobs since President Obama took office. 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.”
And the U-6 unemployment rate, which includes people marginally attached to the labor force along with people working part-time for economic reasons, remained high at 14.7 percent, which is equal to the August number. Some analysts consider the U-6 number the “real” unemployment number, as it includes a subset of people not included in the main unemployment tally — those who have dropped out of the labor force but still want to work.
Are things getting better economically for your association? Let us know what you think in the comments.
(TMG archive photo)