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It's still uncomfortably high - but unemployment rate falls to 7.8 percent

By Catholic Online (NEWS CONSORTIUM)
October 5th, 2012
Catholic Online (

Many would say that 7.8 percent unemployment is still too uncomfortably high - but the U.S. unemployment rate has fallen to its lowest level since January 2009, when President Barack Obama first took office. Unemployment dropped to the lowest it has been in almost four years last month, giving President Barack Obama a potential upbeat talking point as the presidential race heads into its final week.

LOS ANGELES, CA (Catholic Online) - The Labor Department reported last week that the unemployment rate fell to 7.8 percent in September. This figure represents a decline of 0.3 percentage point and the lowest since January 2009. The economy managed to create 114,000 jobs and generated 86,000 more jobs in July and August than first estimated.

A household survey from which the jobless rate is derived showed 873,000 job gains last month -- the most since June 1983. The drop in unemployment came even as Americans come back into the labor force to resume the hunt for work. The workforce had shrunk in the prior two months.

The findings are highly significant this election year, as it is the second last report before the November 6 election that pits Obama against Republican Mitt Romney.

"It's a little confusing, to be honest with you. The number of jobs created wasn't that high but the unemployment rate came down and the participation rate went up a little bit, so it's confusing. All in all, it doesn't change the trajectory of what the jobs environment has been really for the last year," Ron Florance, managing director for investment strategy for Wells Fargo Private Bank said.

The two numbers, the unemployment rate and the non-farm payrolls number come from two separate reports done by the Bureau of Labor Statistics.

The unemployment report is based on the so-called Household Survey and it measures the number of unemployed as a percentage of the labor force. The Household Survey is seen as highly volatile and many economists give it much credence. The survey includes the unemployed who are out there actively seeking work and it excludes people who have left the work force and are not applying for jobs.

The non-farm payrolls number comes from the establishment survey and is considered the more accurate of the two.

"The rule of thumb when the two surveys tell different stories is to go with what the establishment survey says. However, the household survey provides reasons to be somewhat more optimistic about job opportunities for American workers," Heidi Shierholz, an economist for the liberal-leaning Economic Policy Institute says.

A Reuters/Ipsos poll released after Wednesday's first presidential debate last week showed Romney gained ground and is now viewed positively by 51 percent of voters. Obama's favorability rating remained unchanged at 56 percent.

Economists blame the so-called fiscal cliff for the slowdown in business hiring, which has left millions of Americans working either part-time or unemployed and too discouraged to look for jobs.


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