President Barack Obama received some welcome news this morning. The U.S. Bureau of Labor Statistics reported today that the unemployment rate fell below 8% for the first time in 3 years. The unemployment rate decreased to 7.8 percent in September, and total nonfarm payroll employment rose by 114,000. The unemployment rate is the lowest it has been since Obama took office in January 2009.
The Labor Department revised upward its figures for July and August. August figures were revised up from 96,000 to 142,000 jobs. July's figures were revised upward to 181,000 jobs added from 141,000. That is a total of 96,000 additional jobs that were added during the summer.
In this whirlwind election season, the modest but OK labor report will temporarily serve as a counter weight in the news cycle to Obama’s poor performance at Wednesday’s debate. The unemployment rate has decreased now for two consecutive months. With only one report left before the election, Obama can accurately, but cautiously promote a downward trend in unemployment.
Mark Lamkin, CEO and chief market strategist at Lamkin Wealth Management, told USA Today, that today's job report was a "debate and political campaign mover." He went on to say that the lowest jobless rate since Obama took office would give the president a boost following a so-so performance in Wednesday's first presidential debate.
USA Today said the stock market rallied at the news of the labor report. They said the Dow Jones industrial average and Standard & Poor's 500 index have a shot at closing at fresh bull market highs and their highest levels since December 2007. The Dow Jones industrial average, which is up 11.1% this year and at levels not seen since December 2007, started the day at 13,575.36, less than 22 points away from a new cycle high.
Fox News’ Geraldo Rivera believes that if the Dow is approaching 14,000 on Election Day Obama will win.
The Huffington Post said the Dow Jones industrial average futures jumped from 30 points up to 45 points up after the report was released
Unlike in August when the unemployment rate fell to 8.1 percent, driven by people who are dropping out of the labor force, Harry Holzer, public policy professor at Georgetown University told ABC News that September’s decline in unemployment “actually reflects a substantial increase in employment." The labor report said the number of discouraged workers, persons not currently looking for work because they believe no jobs are available for them, had declined in September.
After three months of virtually no change, the Labor department household survey, which asks individuals about their employment situation, said that there were 873,000 more employed Americans in September than there were in July.
The ADP National Employment Report® showed that the economy added 162,000 jobs. ADP said employment in the private, goods-producing sector added 18,000 jobs in September. Manufacturing employment rose 4,000, while construction employment rose 10,000, the strongest since March when mild winter weather was boosting construction activity. The financial services sector added 7,000 jobs in September, marking the fourteenth consecutive monthly gain.
The private sector added 104,000 jobs, below the job growth needed for the unemployment rate to keep pace with population growth. Employment increased in health care and in transportation and warehousing but changed little in most other major industries. Manufacturing lost jobs and the report said that net manufacturing job growth has been flat since April. Forbes magazine issued a cautionary note that public sector accounted for almost 10% of the job growth.
Conservative financial magazine Forbes was surprised by the favorable job report. Forbes said, “The unemployment rate, fell 30 basis points month over month and marks the lowest level in more than 40 months.” They went on to say, “Given the other employment data that we’ve seen this week as well as slower job creation over the last few months, the drop in the unemployment rate is rather surprising."