WASHINGTON – The unemployment rate unexpectedly dropped to 7.8 per cent in September, reaching its lowest level since President Barack Obama took office and providing a boost to his re-election bid.
The Labour Department said today that employers added 114,000 workers to their payrolls last month, a moderate number, but it said a combined 86,000 more jobs were created in the prior two months than it had previously thought. Other aspects of the report also were strong.
In particular, a separate survey of households found a big surge in hiring. That pushed the jobless rate down by 0.3 percentage point to its lowest level since January 2009, the month Obama took office. Economists had expected it to rise to 8.2 per cent.
The drop in the unemployment rate came even as Americans returned to the labour force to resume the hunt for work. The workforce had shrunk in the prior two months.
“There is something in these numbers for everyone. The rise in the participation rate shows somewhat of a real improvement in the labour market,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
The households survey, which can be very volatile month-to-month, showed employment increased 873,000, but it also showed a rise of 582,000 in the number of Americans who were working part time even though they wanted full-time work.
Tom Porcelli, chief US economist at RBC Capital Markets in New York, said that took a bit of the shine off the report.
“That does not mean this is a bad report, just a ho-hum report,” he said.
US stocks opened modestly higher, while prices for Treasury debt fell. The dollar rose versus the yen and the euro.
US interest rate futures slipped as traders bet an improving jobs market could lead the Federal Reserve to back off its monetary stimulus earlier than had been expected. (Reuters)