In the second-to-last jobs reports before the election, payroll increased by 114,000 in September, bringing unemployment from 8.1% last month down to 7.8% – the lowest since January 2009. Significantly, the unemployment rate fell even as labor force participation increased, as opposed to when it has fallen in the past due to the unemployed giving up and leaving the job market altogether. Brad Plumer celebrates the revisions:
The truly upbeat part came in the data revisions. As it turns out, those lackluster months of July and August were better than we thought. The agency now says that the U.S. economy added 181,000 jobs in July, rather than 141,000. And it says that the economy added 142,000 jobs in August, rather than a mere 96,000 as initially reported. To be clear, this is still a middling recovery. At this pace, it will take more than a decade to return to full employment. But at least the economy wasn’t slowing down dramatically over the summer, as originally reported.
Greg Ip breaks down the growth by sector:
[T]he gains were concentrated in health care, transportation and warehousing, and finance. Manufacturing employment dropped, which corroborates weakness in factory activity that may reflect the slowing global economy and worries about a recession if politicians don't move the year-end "fiscal cliff."
Yglesias looks at the politics of the report:
Just to show what a difference small changes make, consider that over the past two weeks the world has added two great new talking points for Obama. One is that per this month's BLS household survey, the unemployment rate is now back down to where it was in January 2009 before he took office. The other is that between the rebaselining of the first quarter and the upward revisions to July and August it's now clear that more people are at work today than were when Obama was inaugurated—with the net private sector gains even stronger.
John Sides claims "late changes in the economy aren’t that consequential" to the horserace. But:
If this jobs report matters in any way, it is by shifting the news coverage of the campaign from “Obama bombed in the debate” to “Hey, unemployment fell!” This report is enough of a departure from previous reports to generate some positive news coverage. And this will help to displace the positive news coverage Romney was receiving as a consequence of his debate performance. Given that it’s this news coverage that would boost Romney in the polls, news coverage of the job report could—conceivably, possibly, maybe—limit the boost.
Ben Casselman adds an important caveat to the report:
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 Bonddad Blog zeroes in on other details:
[O]ne of the most accurate gauges of layoffs — a better leading indicator than initial jobless claims, and an element of ECRI's unpublished Short Leading Index, is the number of those unemployed from zero to 5 weeks. It decreased by 302,000. This is totally inconsistent with entering a recession.
Brad DeLong argues that we should keep juicing the economy:
Clinton ran big surpluses (and Gore was planning to run big surpluses) during boom years. George W. Bush deliberately threw that policy away. Now we are in the position where we ought to run even bigger deficits until the economy recovers, but we are not sure if we can afford to. Four years ago I would have said that the odds were 50-50 that we could afford to run bigger deficits until the economy recovers. Now I think the odds are 90-10. That's a risk worth taking to boost spending and put people back to work.
Jared Bernstein reflects:
Obviously, a lot goes into the formation of people’s views about the intersection of their economic conditions and politics, but when it comes to jobs numbers, I think it’s momentum that matters most—whether we’re moving in the right direction. That we are, and a bit faster than we were even one quarter ago, though still not fast enough to reliably leave the Great Recession in the dust.
Meanwhile, after former GE CEO and business guru Jack Welch accused Obama of cooking the books, a slew of other "unemployment-rate truthers" have cropped up.
(Chart from CBPP.)