–Sept Payrolls +114,000 SA, 574,000 NSA; Unemp 7.796%, 44-Month Low
By Denny Gulino
WASHINGTON (MNI) – Those who answered the monthly survey saying
they got a job added up to a bigger number than in almost three decades,
bestowing a 44-month low on the unemployment rate, at 7.796%, and
triggering an eruption of pre-election skepticism about the validity of
that number.
The September jobs report surprise did not extend to payrolls,
which the Bureau of Labor Statistics reported went up 114,000, close to
expectations. Without seasonal adjustment payrolls rose 574,000.
Private payrolls rose 104,000.
But even the payrolls measure had added luster because of the
86,000 added by upward revisions to July and August combined. The Sept.
27 estimate of an annual revision increasing the level of payroll jobs
will have no effect on reported totals until next January’s jobs
reading.
The single biggest standout number, however, was that of employment
generated by the household survey.
“The employment level in the Current Population Survey went up by
quite a bit, increasing by 873,000, which is quite a big change for the
household side by historical standards,” Dori Allard, chief of the BLS
Division of Labor Force Statistics, told MNI. “The last time the change
was larger was in 1983.” In June of that year the change was 991,000.
That meant the unemployment rate improved mainly for the right
reason, more employment, rather than was the case the month before, when
the small improvement was based on a shrinkage of the labor force.
In addition, the number of those unemployed dropped by 456,000,
“also relatively large,” she said in an interview, but that was less of
an unambiguous positive given the small demographic slice of those
between 20 and 24 accounted for a “disproportionate” amount of that
change.
Typically in that age range, “you see them leaving employment in
August and September and this year we saw a little bit of a different
pattern, a greater exodus in August than is typical” and a September
boost, after seasonal adjustment.
Averaging both months, that group’s increase in jobs was “little
changed,” she said. The third element in determining the unemployment
rate, the change in population, showed a relatively small move upward of
206,000.
The labor participation rate went up a tenth, not statistically
significant but in line with the other September household survey
numbers. The employment-population ratio, however, did go up enough to
be “definitely statistically significant,” she said, “and is now 58.7,”
at the highest since the matching May 2010 number.
That number was down in the two prior months but has remained
“relatively flat” over the year. The ratio was enhanced she said with
the month’s switch from the small drop in the “not in the labor force”
category, the drop in the unemployed totals and the increase in
population.
“Employment grew over the month,” she said.
On the negative side, there was a large increase in the number of
people who said they were working part time when they would rather be
working full time. That total rose a “fairly large” 582,000 in the
month.
“It does tend to be a series that moves around some, but this is an
unusually large uptick,” Allard said.
That offset other improvements to keep the broadest alternative
unemployment measure named “U-6″ unchanged, although all the other
narrower alternatives improved in line with the headline rate.
In the politically-charged atmosphere so close to the election,
with jobs a key campaign element for both sides, the eruption of
skepticism about the swing in unemployment below 8.0% was massive
following the 8:30 announcement, in Twitter posts, in blogs and on Web
sites — characterized by the institutionally skeptical zerohedge.com
site which called it a “complete preelection massaging farce.”
Although there is another jobs report just prior to Election Day,
up to half of those voting will have already cast ballots in advance by
then, minimizing its potential to influence and making September’s
report the single most important jobs tally of the campaign.
After even former GE Chair Jack Welch tweeted his own skepticism,
Labor Secretary Hilda Solis defended the BLS crew on CNBC. The BLS, she
said, “did the best calculations, using the best measurement. We’ve been
using them for the last 70 years. We haven’t changed anything.”
And, she said, “The information that I receive is given to me by
our professional civil service staff in the BLS.”
Those with long memories cited the 1992 pre-election jobs report
which showed better numbers than a long string of prior reports, but it
turned out not to help George H.W. Bush hold on to office.
The report also showed that besides the 44,000 increase in the
health care category, restoring some of its long-absent vigor, there was
a 17,000 gain in transportation and warehousing, for the month, Allard
said, predominantly school bus and school employee transportation
drivers. The upward revision to 181,000 from 141,000 in August was also
mainly local education, she said.
The third source of strength in September was to a small extent in
financial activities, up 13,000. That was broken down into 7,000 for
real estate and 6,000 among loan staff.
Average hourly earnings rose 7 cents, a large jump for any single
month, but doing little for the annual change, at 1.8%.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: MAUDS$,MFU$$$,MGU$$$,MT$$$$]
