Is anyone surprised? After 43 consecutive months with the unemployment rate above 8.0 percent – and with just 30 days left before the election – unemployment magically dropped to 7.8 percent.
You can call me "skeptical."
Let's start by looking at what happened with the population totals. According to the newly released BLS report, the "civilian non-institutional population" increased 206,000 in September (table A). When adjusted for the current Labor Force Participation Rate, 63.6 percent, the workforce added 131,000 just from natural growth of the population. However, the new report says a total of 418,000 were added to the total workforce population (287,000 more than just population growth).
Job growth well in excess of population increase would be a very good thing if it were only that easy.
But, according to the confusing statistical estimates from the Labor Department, only 114,000 new payroll jobs were added in the month of September (table B), which is 32,000 less than the disappointing average year-to-date for 2012 (146,000 per month). Furthermore, the new payroll jobs number is less than the growth in the population. Given this data, you might wonder how the unemployment rate declined. You would not be alone.
The answer lies with the part-time employment statistics which are peculiar, at best. Normally, with students returning to school, the number of part-time jobs declines in September. Further, if a real economic recovery was happening, the number of part-time jobs would progressively decline to normal levels. But, instead, we're told by the Labor Department that part-time employment increased in September by 582,000 – more than a 7 percent increase in just 30 days.
The part-time jobs are apparently singularly responsible for the drop in the unemployment rate. Even if it is an accurate estimate of the current economy, is anyone really encouraged that 8.6 million Americans must settle for less than full time work due to "economic reasons" per the BLS data?
In a moment of unintended honesty on October 2, 2012, Vice-President Joe Biden volunteered that "the middle class has been buried for the last four years…" We agree. And the policies and agenda of the Obama Administration have greatly compounded the suffering.