WASHINGTON – The U.S. unemployment rate fell to 7.8 per cent last month, dropping below 8 per cent for the first time in nearly four years. The rate declined because more people found work, a trend that could have an impact on undecided voters in the final month before the presidential election.
The Labor Department said Friday that employers added 114,000 jobs in September. The economy also created 86,000 more jobs in July and August than first estimated. Wages rose in September and more people started looking for work.
The revisions show employers added 146,000 jobs per month from July through September, up from 67,000 in the previous three months. The unemployment rate fell from 8.1 per cent in August, matching its level in January 2009 when President Barack Obama took office.
The decline could help Obama, who is coming off a disappointing debate performance against GOP challenger Mitt Romney.
The report may be the last to sway voters. The October jobs report will be released only four days before Election Day.
“An overall better-than-expected jobs report, consistent with most recent data that suggest the economy is gaining some momentum,” said Sal Guatieri, an economist at BMO Capital Markets, in a note to clients. “The sizeable drop in the unemployment rate could lift the President’s re-election chances following a post-debate dip.”
Stock futures rose modestly after the report. Dow Jones industrial average futures, up 30 points just before the report came out, were up 45 points after it was released.
The yield on the 10-year U.S. Treasury note climbed to 1.73 per cent from 1.68 per cent just before the report, a sign that investors were more willing to embrace risk and moving money from bonds into stocks.
The job market has been improving, sluggishly but steadily. Jobs have been added for 24 straight months. There are now 325,000 more than when Obama took office.
In September, the number of people who said they found work soared 873,000 and the size of the work force also increased. That brought the number of unemployed down to 12.1 million, the fewest since January 2009.
Those figures come from a survey of 60,000 households that determines the unemployment rate. The government also does a second survey of roughly 140,000 businesses to determine the number of jobs created or lost.
The September job gains were led by the health care industry, which added 44,000 jobs — the most since February. Transportation and warehousing also showed large gains. The revisions showed that governments actually added 63,000 jobs in July and August, compared with earlier estimates that showed losses.
Still, many of the jobs added last month were part time. The number of people with part-time jobs who wanted full-time work rose 7.5 per cent to 8.6 million.