Few economic reports are more anticipated than the monthly update from the Department of Labor detailing the status of U.S. payrolls and the nation’s unemployment rate. And, as a rule, rarely does the report live up to the level of anticipation.
But one feature of the report issued on Friday offered a glimmer of hope that the jobs situation could be on the mend. The nation’s unemployment rate fell to 7.8 percent in September, down from 8.1 percent the previous month.
One local economist said the data supporting the drop in the jobless rate is impressive.
“Employment, according to a survey of households that includes the self-employed, surged by 873,000 during the month, far outpacing the gain in the labor market,” said Lynn Reaser, chief economist at Point Loma Nazarene University’s Fermanian Business & Economic Institute.
Reaser referred to payrolls rising in September by 114,000, a solid number but well below the level of growth needed to bring the jobless rate down. The household survey includes many people not calculated in the payroll data.
“The massive disconnect between the payroll survey and the household survey of employment over the entire third quarter should leave everyone less confident about what the September jobs numbers are saying about the economy," said Robert Dye, economist at Comerica Bank. "The September gain in the household survey of employment was the largest monthly increase since June 1983.”
The national survey matches the improvements that have been seen in California and San Diego in recent reports.
The unemployment rate in California dropped in August to 10.6 percent, a small decline from the previous month, as payrolls in the state increased by 12,000.
In San Diego County, the jobless rate fell to 9 percent in August, down from 9.3 percent the previous month. Payrolls here rose by 900.
“Clearly the labor markets in California are on the mend, and the worst of the downturn is behind us," said Christopher Thornberg, of Beacon Economics, in his economic forecast released on Wednesday at the San Diego Economic Forecast Conference. "With most major industries and regions across the state solidly in growth mode, Beacon Economics is forecasting that California labor markets will continue to improve in the remainder of 2012 and beyond.”
But not all forecasts are as positive.
“This economy remains on a slow but not slowing path," said Kathy Bostjancic, director of macroeconomic analysis at The Conference Board. "More demand would help, as would fewer ill winds blowing in from a contracting Europe and slower emerging markets. More certainty on taxes post-election would also help.”
The consensus among market observers is the September report was a step in the right direction, but PLNU’s Reaser said, “We are still a long way from full employment.”
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