Total unemployment in the U.S. fell, according to the Labor
Department, from 8.1 to 7.8 percent in September, while the economy
added 114,000 jobs. Revisions to past months showed more than
60,000 more jobs were added over the previous two months than
initially reported. The participation rate, which can create an
illusion of falling unemployment rates when discouraged workers
leave the workforce, in September actually grew by 0.1 percent
while the number of discouraged workers fell by 42,000.

Total employment growth and unemployment are measured by two
separate but closely related surveys; the household survey which
surveys individual households and the establishment survey which
surveys employers. While the establishment survey saw just 113,000
jobs created, the household survey saw more 873,000 new people
reporting being employed and 456,000 fewer people unemployed.
Nearly half of that growth was among workers aged 20 to 24, and
about half of the total growth was in part-time positions, implying
it may be part of a seasonal bump as college students seek out
part-time jobs during the fall semester.

Of those with a bachelor’s degree and higher, the unemployment
rate remained unchanged at 4.1 percent, but participation grew from
75.5 to 75.9 percent, as 103,000 more people reported employment.
For those with just some college experience or an associate’s
degree, the participation rate grew from 68.3 percent to 68.8
percent as 196,000 more people reported employment. There was
virtually no growth in employment for those over 25 with a high
school diploma or less.

The professional, managerial, and related unemployment rate fell
from 4.4 to 3.9 percent from September a year ago, while the
unemployment rate for sales and office occupations fell from 9 to
7.5 percent over the same period.

On an industry basis, which is only reported in the
establishment survey, growth was spread amongst service-providing
industries with no stand-out growth aside from healthcare, from
which almost half, 49,000 positions, of the reported growth
derived. One variation seen in September was an increase of 13,000
state education employees, which was enough to grow total
government employment by 10,000 during the month, the first time
that sector has seen such growth since the 2010 census.

While the report was one of the most positive in several months,
it is tempered by a variety of factors. The large rate of part-time
employment growth means a relatively small amount of consumer
buying power is being added to the market. Furthermore, recent
revisions of the U.S. GDP rate showed an annualized growth rate of
just 1.3 percent in the second quarter, meaning projections of up
to 1.9-percent growth in the fourth quarter will likely be revised
down. Perhaps most cautioning is a similarity to 2011, where we saw
a strong second half of the year, only to be followed by
disappointing numbers in the new year.

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