WyBlog

The monthly jobless rate dipped below 8 percent for the first time in nearly four years, according to new economic data that could give President Obama a campaign-trail lifeline after a disappointing debate performance.

The September report showed the unemployment rate falling to 7.8 percent. The number of jobs added was still a modest 114,000, and many of them were part time -- but the president's campaign will surely use the lower rate to boost its argument that the economy is heading in the right direction.

Looking at the internals, there were few true bright spots, but at least it wasn't as bleak as the last couple of months. The U-6 number, which captures unemployment and underemployment as well as the marginally attached, stayed the same as in August at 14.7%. The civilian population participation rate rose a tenth of a point to 63.6%, exactly where it was in the 1982 midterm election, and only missing the 31-year low set last month.

The number of unemployed dropped 456,000 last month, while only 114,000 jobs got added. That either means that 342,000 people left the US, or they left the work force in one way or another. In the household survey, though, the number of people with jobs rose by 873,000 — a very strange outcome that makes it appear that more than one tweak has been done to previous data. (The +873K is in the seasonally adjusted number, by the way.)

We already noted the absolutely stunning surge in reported Household Survey jobs which "added" 873,000 jobs, or the most since 2003 and the second most in the past decade, which was just a little bit off the Household Survey used in the monthly NFP jobs changes, which came at 114,000, or about 8 times less. But what was the reason for this epic jump in Household survey jobs? Simple, and those who have read our series on America's transition to a part-time worker society know the answer. The reason is that the number of part-time people employed for economic reasons soared by 582,000 to 8,613,000, the most since October 2011, and the largest one month jump since February 2009, when "restoring" confidence in the economy was all the rage... and just before the Fed announced the full blown QE1 in March of 2009. Odd symmetry.

So putting it all together, what does this mean for the true state of the US economy? Recall back in September one of our Charts of the Day was the number of Unemployed and Underemployed for the month of August, which was 25.8 million. Readers may be surprised to learn that when putting it all together, in September this number increased to 26.2 million.