Unemployment rate drops to 7.8 percent, nearly 4-year low
While uncharacteristically positive, the most recent unemployment numbers were the result of a combination of factors.
By JACOB IMHOFF, Guest Writer
The national unemployment rate decreased abruptly to the lowest point since February 2009, falling to 7.8% from 8.1% following revised jobs data and an uptick in overall hiring to the tune of 114,000 during September.
Additionally, jobless claims decreased by 30,000, though this was due in part by incomplete information presented to the Bureau of Labor Statistics. “One large state didn’t report additional quarterly figures as expected, accounting for a substantial part of the decrease”, stated Dow Jones and a Labor Department economist.
The major state apparently submitted weekly figures, but failed to report quarterly numbers, leading to lower than expected filings nationally. The impact of this omission remains unclear until revisions are made, however.
The decline has been the source of backlash and relative confusion as of late, most notably from former General Electric CEO Jack Welch. “Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers”, he stated after the report was released last Friday.
While uncharacteristically positive, the most recent unemployment numbers were the result of a combination of factors. According to the BLS, involuntarily part-time workers increased during the month of September, but the overall increase in employment was a result of additional full-time jobs in professional services and education and health services in particular, which accounted for an increase in 13,000 and 49,000 jobs, respectively.
This may signal a somewhat-less-bleak outlook to the jobs market on the surface. However, 55,000 government workers were hired in August and September and the manufacturing sector lost 32,000 in that same time frame. The anemic GDP report supports the manufacturing loss, as the nation slowed to a crawl at an annualized rate of 1.3% in the second quarter. Furthermore, the 7.8% rate doesn’t account for workers that are considered underemployed or individuals who have dropped out of the workforce entirely.
In short, the most recent unemployment numbers are likely temporary and production overall could continue to slip. The recent gains may be slashed following the automatic set of tax increases and budget cuts the U.S. government faces at the end of the fiscal year as well.
“We’re losing the jobs that we need and we’re gains the jobs that we don’t”, Peter Schiff, President of Euro Pacific Capital, stated Saturday.