The September jobs report came out this morning. Press accounts are trumpeting the drop in unemployment from 8.1 to 7.8 percent. This number comes from the Current Population Survey, which examines 50k plus households each month. According to the CPS, employment rose by 873k and unemployed persons dropped by 456k from August to September. On net this implies that 417k persons who were not even in the labor force in August found jobs in September, which strikes me as implausible. Lay persons should keep in mind that it is hard to extrapolate from 50k households to a labor force of 155 million. Another sign of unusual volatility in the numbers: CPS data show declines in employment in July (-200k) and August (-100k) which probably were overly pessimistic, thereby making part of the big jobs gain in September a statistical correction.
On a month to month basis, the monthly survey of establishments is a more reliable indicator of employment trends. It shows a slow but steady increase in jobs of 100 to 180k each month over this period. My take: the jobs recovery remains painfully slow but at least it is moving in the right direction. Make whatever political hay you want out of that comment!
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