The economy “has come too far to turn back now.”
By DIANE STAFFORD
The Kansas City Star
“We don’t have to stay on the path we’ve been on.”
September’s unemployment rate of 7.8 percent — the lowest since he took office in January 2009 — gave President Barack Obama ammunition Friday to continue saying his economic recovery policies were working.
“We are moving forward again.” Obama said on the campaign trail in Cleveland.
Challenger Mitt Romney countered, “This is not what a real recovery looks like,” particularly noting a loss in manufacturing jobs.
Across the political and economic spectrum, the monthly employment and unemployment numbers from the U.S. Bureau of Labor Statistics were sliced and diced like celery in a food processor.
Romney zeroed in on a net loss of 600,000 manufacturing jobs while Obama has been in office. Obama supporters countered that the bureau’s historic tables show a loss of 4.5 million manufacturing jobs during George W. Bush’s terms, reflecting a global evolution in jobs.
In the end, after analysts sifted through the pieces, there was something close to agreement: The U.S. job market continues to improve, albeit more slowly than anyone would have hoped.
“We are digging our way out of a very deep hole,” said Alan Krueger, chairman of the White House Council of Economic Advisers.
Still, said Republican House Speaker John Boehner, “Job creation is far too slow, and the unemployment rate is far too high.”
Wall Street reacted with a modest gain of 34.79 points on the Dow Jones Industrial Average. But broader stock indexes — the Standard & Poor’s 500 and the Nasdaq — declined Friday.
But Friday’s better-than-forecast jobs report was partly overshadowed by pre-election controversy, fueled by former General Electric chairman Jack Welch and a few other commentators who suggested that the labor bureau manipulated the data to be favorable to Obama.
Speaking on CNBC, Labor Secretary Hilda Solis said such accusations were insulting.
“We have a very professional civil service,” she said. “I have the highest regard for our professionals that do the calculation at the bureau. They are trained economists.”
The conspiracy theories prompted some economists to jump into the fray with lessons about how the data are collected by the Labor Department and the Census Bureau.
“It is simply outrageous to make such a claim (of manipulation) and echoes the worrying general distrust of facts that seems to have swept segments of our nation,” said Lawrence Mishel, president of the Economic Policy Institute.
Mishel and others explained that the monthly report is based on two separate surveys. The unemployment percentage is derived from a statistically valid, random survey of 60,000 households. Respondents are asked whether, in the past four weeks, they worked for pay or actively looked for a job.
The companion employment survey — which produced the September figure of a 114,000 net gain in payroll jobs — reaches about 140,000 businesses to ask whether they added or cut jobs.
The business survey is amended every month with fresher information. In September, for example, the report said job creation in July and August was 86,000 greater than originally reported.
Results from the household and employer surveys often give slightly different pictures of the economy in any given month, but over time they agree on the trend line.
The October national jobs report is due to be published on Nov. 2, four days before the election. Most political analysts agreed that the September report had more time and ability to influence voters, many of whom will have cast advance votes before the next report.
Some of the positives charted from September 2011 to September 2012:
• The jobless rate fell by 1.2 percentage points, largely because 873,000 more people had jobs in September, the biggest jump since January 2003.
• More than 2.8 million people found jobs.
• More than 1 million people entered the labor force.
• Job creation averaged 151,000 a month.
• Private sector employment has increased for 31 straight months.
There were less-than-rosy numbers, too:
• Part-time employment grew in September by 582,000 among workers who had part-time jobs because of business conditions or because that’s all they could find..
• The average length of unemployment rose by about half a week to 39.8 weeks.
• Four in 10 of the unemployed have been out of work at least 26 weeks, the official definition of long-term joblessness.
Many analysts zeroed in on the part-time employment situation, looking at it from both the supply and the demand side.
Employers, cautious as they await the outcomes of the election, taxation changes and health care reform, are tending to add part-time rather than full-time positions to meet rising business needs. Part-time positions give them more staffing flexibility and generally don’t include the expense of some employee benefits.
Workers, many of whom have exhausted the unemployment benefits available to them, are taking part-time jobs that previously weren’t financially attractive enough for them to consider.
Several phases of emergency and extended jobless benefits, enacted because of the recession’s depth, have ended or will run out by the end of the year.
Those phaseouts leave unemployed job-seekers with only the weekly checks available to them under their states’ regular benefits programs. In Missouri, the General Assembly reduced eligibility to 20 weeks. In Kansas, regular state benefits end after 26 weeks, the norm in most states.
Chad Stone, chief economist with the Center on Budget and Policy Priorities, said the numbers “left no doubt that long-term unemployment remains a significant problem.”
Stone advocates for extension of emergency unemployment benefits. Republican-dominated legislatures disagree.
Sophia Koropeckyj, managing director for Moody’s Analytics, said she expects the current slow-growth job trends to continue “for several more quarters.”
U.S. job growth “is weighed down by the weak global situation, the impending U.S. fiscal cliff and uncertainty about federal regulations and policies,” she said.
That includes tax cuts that are due to expire at the end of the year and mandated cuts in government spending. Both could have significant trickle-down effects in the economy — unless Congress acts to retain or restore them.
For the majority of Americans who have jobs, “income trends continue to look solid, with average hourly earnings increasing 0.3 percent in September,” said Scott Anderson, chief economist with Bank of the West.
That brought the year-over-year income increase to 1.8 percent.
Average hourly earnings for all employees on private, non-farm payrolls rose by 7 cents in September to $23.58.
Average hours worked also rose a tad — to 34.5 hours from 34.4 hours in August, but that represented no lengthening in the average work week over September a year ago.
The report noted, though, that the average manufacturing work week edged up by a fraction of an hour to 40.6 hours, and factory overtime averaged 3.2 hours a week.
The manufacturing work week was stable even as that sector reported a net loss of 16,000 jobs in the month.
Other net job losers were computer and electronic products and the printing sectors.
Net job gainers in September were health care — the job-growth leader throughout the recession — trade, transportation, utilities, warehousing and financial activities.
After months of government job losses, state jobs bumped up by 13,000 nationally, almost exclusively in education. Federal jobs, excluding the Postal Service, gained 6,800 positions. Local government jobs were down 7,000.
Gary Burtless, senior economist at The Brookings Institution called national job growth “heartbreakingly low” and pointed out that the national labor force participation rate — among people 16 and over — has fallen by 2.3 percentage points since late 2007.
A healthier job market would have attracted 2.5 million to 3 million more participants, Burtless said. But he was careful to add that “about half of the decline can be traced to an aging population. As the baby boom gets older, a larger percentage of adults is in age groups with low labor force participation rates.”
To reach Diane Stafford, call 816-234-4359 or send email to firstname.lastname@example.org.