Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
September 22, 2014

Unemployment Rate Falls Below 8%

The Bureau of Labor Statistics issued its employment numbers for September, showing employment increasing by 114,000 jobs and the unemployment rate falling to 7.8% from 8.1% in August.

Here is a roundup of reactions, to be updated throughout the day:

Greg Ip: “Non-farm payroll employment rose by 114,000, an unremarkable number in itself and pretty close to Wall Street’s expectations. But the two prior months were revised up sharply. Payrolls rose 142,000 in August and 181,000 in July, a cumulative 86,000 more than first reported… state and local jobs have climbed a relatively hefty 72,000 in the last three months. That’s a welcome reversal from the shrinkage of previous months.”

Dylan Matthews shows the employment situation in six charts: “the proportion of people in the labor force actually went up, suggesting the fall in the unemployment rate reflects a real improvement, rather than people stopping their work search.”

Justin Wolfers: “Why today’s payrolls revisions are a big deal: Positive revisions tend to follow positive revisions.”

Matthew Yglesias: “On a seasonally adjusted basis, there were more government workers in August 2012 than in July, and even more in September. And who’s leading the charge? As you can see above, it’s teachers. All told, state and local education makes up about half of the public sector workforce in the United States so when we shift from firing teachers to hiring them it makes a big difference.”

FT Alphaville: “The frequently reported U-6 measure actually stayed unchanged at 14.7 per cent. The reason for this is that it counts as unemployed people who are ‘employed part time for economic reasons.’… The number of part-time workers accounted for much of the increase (582,000) in employment in the household survey, which is why all the other alternative measures of unemployment climbed.”

Bill McBride sees mixed messages: “All that said, the economy has only added 1.3 million payroll jobs over the first nine months of the year. At this pace, the economy would only add around 1.8 million private sector jobs in 2012; less than the 2.1 million added in 2011… there are 4.84 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 5.03 million in August. This is generally trending down and is at the lowest level since early 2009. Long term unemployment remains one of the key labor problems in the US.”

Free Exchange puts the numbers in perspective.: “If employment rises at the rate it has so far since the start of 2012 while the population continues to grow at its average rate since the start of 2007, how long will it take for the employment-population ratio to return to its pre-crisis level?… the middle of 2038. So instead of a lost decade, it looks as if the United States is in for three in a row.”

Tim Duy thinks this proves the Federal Reserve was correct in launching QE3: “In my mind, the policy significance of the twists and turns is not so much that the economy was threatened with excessive slowing this spring, but that the Fed’s anticipated acceleration in activity was to be unrealized.”

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