US jobless rate falls to 7.8%
Job growth remained tame in September, with the economy creating just 114,000 net new positions though the unemployment rate fell to 7.8 percent, the first time it has been below 8 percent in 43 months.
The report presented a slew of contradictory data points, with the total employment level soaring despite the low net number.
The falling jobless rate had been a function as much of the continued shrinking in the labor force as it was an increase in new positions.
But the government said the total number of workers employed surged by 873,000, the highest one-month jump in 29 years. The total of unemployed people tumbled by 456,000.
The total labor force grew by 418,000, possibly accounting for the relatively modest net level of job growth compared to the total employed. The labor force participation rate, which reflects those working as well as looking for work, edged higher to 63.6 percent but remained around 30-year lows.
“You have to be careful, particularly about components of the household numbers that are highly volatile,” said Liz Ann Sonders, chief investment strategist at Charles Schwab in San Francisco. “It’s been our view that we would see a slow but consistent improvement in the jobs picture. I’m not sure this changes that view much at all.”
Economists were expecting 113,000 more jobs and the rate to rise to 8.2 percent. Last month saw 142,000 new jobs as the rate dropped from 8.3 percent in July.
However, those numbers were revised higher, with the Labor Department putting July’s number at 181,000 from the previously reported 141,000 and August up from an originally reported 96,000.