Not only was September a good month (BLS release), with the unemployment rate falling to 7.8 percent from 8.1 percent in August, but the government has revised upward the job gains in July and August. Those revisions are significant - a total of 86,000 jobs, or put another way, the economy added an average of 146,000 positions over each of the last
three 12 months. September's gain was 114,000, about what economists had expected and not an especially strong number. But the sharply lower jobless rate - and the fact that more people entered the workforce - will be the big story. The early read is that this is a surprisingly strong report. Now for the conspiracy theory: That the government somehow manipulated the household survey, which helps determine the unemployment rate. Or as former GE Chief Executive Jack Welch so elegantly tweeted, "these Chicago guys" can't debate, "so they change numbers." From NYT columnist Floyd Norris:
You have to wonder why, if the Obama administration were going to fake numbers, it would choose the less-widely watched household survey. And you have to wonder why anyone would think the bureaucrats in the Bureau of Labor Statistics would follow such orders without any leaks from whistle-blowers. Actually, it should come as no surprise that Mr. Welch would think bureaucrats would willingly change numbers. That evidently used to happen routinely at G.E.
The WSJ's Ben Casselman provides further context:
The monthly jobs reports are really two reports. The first, based on a survey of businesses and government employers, is used to figure out how many jobs were gained or lost in a given month. The second, based on a survey of individual households, is used to calculate the unemployment rate and related measures. Over time, the two generally tell similar stories, but they sometimes diverge over the shorter term. In September, the employer survey showed the same kind of modest, bump-along growth we've become accustomed to in recent years. But the household survey showed a far more dramatic shift, with nearly 900,000 more people reporting that they're working, and close to half a million fewer people showing up as unemployed. The bad news? Economists generally give more weight to the business survey, which is larger and generally considered more reliable.
The report does have a few crumbs for the Romney campaign. The Labor Force Participation Rate, at 63.6 percent, is well below the 66 percent to 67 percent rate that was normal over the last 20 years (although Bill McBride at Calculated Risk points out that most of the recent decline is due to demographics). Also, a broader measure of unemployment, which includes folks who are under-employed in some way, was flat at 14.7 percent. And of course there remain many millions of long-term unemployed. But spin-wise, Romney faces an uphill battle. After Wednesday night's debate, President Obama could hardly have dreamed of better numbers. By the way, the Dow is up 75 points.