According to this morning’s new jobs data for September, the U.S. unemployment rate has dropped to below 8% for the first time in close to 4 years. When you parse the report out, you can see some pluses and some minuses. The bad news first:
- We are still seeing very slow growth, with 114,000 jobs added, which falls below the expected number of 118,000 jobs.
- We lost jobs in the manufacturing sector (16,000 jobs lost in September).
- The number of part-time workers has increased (8.0 million in August, to 8.6 million in September).
And now the good news:
- Unlike what we have seen in some previous months, the lower unemployment rate this time is primarily due to jobs added, and NOT due to people dropping out of the search for jobs. The labor-force participation rate, which indicates how many people are actively looking for work, was “relatively unchanged”, according to the report by the Bureau of Labor Statistics.
- The numbers for July and August have been revised upward, indicating a gain of 86,000 additional new jobs above what had originally been reported for those 2 months.
- Government jobs have been lagging behind private-sector jobs, with more layoffs than hires for the most part. This month, some of these government jobs have returned.
- Helloooooo! It’s below 8%!
This is certainly a mixed bag when you look at it in detail, but it answers the overall question of whether job growth is headed in the right direction with an unqualified “yes”. The progress is slow, and some industries are doing better than others – certainly we’d like to see that manufacturing number go up ASAP – but there is now a net gain in jobs under the Obama presidency, as much as it pains Republicans to hear that fact.
The political question this now raises is, how will this information factor into the race for the White House? Well, certainly we will expect this news to bolster President Obama after a badly-received debate performance, and it gives him some fresh ammunition to bring to the next debate. We can also expect the GOP to spin this report as negatively as possible – for them, bad news is good news, and there’s no good news that they can’t turn bad if they work it hard enough. This report, while encouraging, is not the resounding triumph that some folks would like to see. It will not move the needle for those who are already leaning one way or the other in this election. If you have a fundamental problem with Obama, you’re not going to let something as trivial as facts interfere with your vote for Romney. But there are still some on-the-fence voters out there – people who were waiting to see something concrete in these last couple of months which would point them toward one candidate or another. This news might well be the information that convinces some of these voters to give the president another 4 years. When things are moving in a better direction, and progress is fragile, the last thing any rational person should want to do is press the reset button and bring in a guy whose policies will take us back to an economic Ground Zero. Hopefully there are enough of these rational folks among the remaining undecided voters. In a race this close, every vote will be important. This jobs report isn’t going to impress everybody, but it might lock up a few more votes of confidence for Obama, and every little bit helps.