President Obama got the pre-election jobs report he could only dream of. While the number of jobs created in September--a modest 114,000--fell in line with lackluster reports earlier this year, the total number of workers employed--as measured by the separate household survey used to set the unemployment rate--surged by 873,000, the highest one-month jump in 29 years.
The total of unemployed people tumbled a dramatic 456,000, but the total labor force grew by 418,000, which kept net job growth from soaring even further. Still, the unemployment rate dropped from 8.1% to 7.8% to match precisely the pre-election target Obama wanted, since that was the exact unemployment rate when Obama took over in January 2009 (see chart below). Bullseye!
Other numbers released today were also encouraging. The Labor Department revised job gains for August up from 96,000 to 142,000, and for July from 141,000 to 181,000. The labor force participation rate, which reflects those working as well as looking for work, edged up from 63.5% to 63.6%, the average work week, which suggests future hiring, edged higher to 34.5 hours, while average hourly earnings, which measures income growth and suggests future spending, increased 7 cents to $19.81.
We have been tracking Obama’s monthly progress toward the two most obvious job creation goals--number employed and unemployment rate. As the chart below shows, he has essentially met his minimum targets--net jobs are where they were when he took office. We had not foreseen this happening, even a month ago.