Huge September Drop In Unemployment, Economy Adds 114,000 Jobs

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The U.S. economy added 114,000 jobs in September, according to the Bureau of Labor Statistics, in line with analyst expectations and comparable to an initially disappointing August figure, which was revised significantly upward Friday from 96,000 to 142,000.

Despite a modest topline payroll figure, the report is filled with positive metrics — most visibly that the unemployment rate plummeted from 8.1 to 7.8 percent, about where it was when President Obama took office, amid the 2008 and 2009 economic collapse. In past months, reductions in the unemployment rate have been attributed to a shrinking workforce, but the September report indicates a 418,000 person increase in labor force participation.

The initial figures come less than 48 hours after the first presidential debate in Denver — a development that’s likely to overshadow third day stories about President Obama’s underwhelming performance. It’s also the first employment report since the Federal Reserve announced a new, open-ended round of monetary stimulus last month.The news indicates that the economy and the labor market performed significantly better over the course of the summer than initial reports suggested at the time. July payrolls were also revised significantly upward to a final figure of 181,000 new jobs.

Growth came largely in the health care and transportation sectors, according to the report, while the manufacturing sector lost 16,000 jobs overall. The public sector added jobs for the second straight month, abating a long trend of state and local austerity. The figures parallel auto sales data, consumer confidence, and ADP’ private payroll estimate, all of which showed strong numbers in September.

But the news also has political implications. Last month, the Department of Labor released broader revisions which pointed to the fact that more jobs had been created during the recover than had been lost in the slump — putting Obama into net positive job creation territory over the course of his presidency. Friday’s report builds on that record.

The significant downward tick in unemployment also moots a favored Republican talking point — that the unemployment rate has not dropped below 8 percent since it first climbed above that level early in Obama’s presidency.

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