The Bureau of Labor Statistics reported this morning that the September unemployment rate fell to 7.8% from 8.1% in August. With fewer jobs being lost and more being created, the employment situation is looking better.
While the total unemployment dropped significantly, the data shows that the drop was not much different than in previous months. Although the total employment rose by 873,000 in September, those who are employed part time (because they cannot find a full time job, or they have been cut back in their hours, also rose from 8.0 million to 8.6 million. So while more people are employed, many are employed at less than full capacity. Along those lines, the average workweek has remained about the same at 34.5 hours in September (only up .1 hours from August).
While the September unemployment rate fell to 7.8%, the magnitude of the drop is at odds with with the number of jobs being created. In September total nonfarm payroll increased by 114,000. However, the average monthly gain for 2012 has been 146,000 and the average for 2011 was 153,000. While the number does appear to be quite a bit lower than the average, it is important to note that the numbers for July were revised by adding 40,000 (141,000 to 181,000) and the revised numbers for August boosted it by 46,000 (96,000 to 142,000). So there is a chance that the September numbers are coming in lower than they should be. If that is not the case, then the only probable conclusion is that more people are keeping their jobs, since new jobs being added are lower than average.
The report looks good for the overall economy. At opening bell the Dow opened up, and has remained so for the first few hours of trading. While there is a chance that the employment situation report is statistically inaccurate, or it may be an anomaly, it certainly is good news from any perspective. The long-term unemployment trends are still hovering at about 8.1%. If Americans are getting back to work and this decrease is bringing the number below 8% for an extended period of time, then it appears as though the economy is picking up speed. When the October employment situation is reported we will know if things are looking up, or if September was a onetime situation.