The unemployment rate tumbled to 7.8 percent this month from 8.1 percent last month, according to new data out of the Bureau of Labor Statistics Nonfarm Payrolls report.
The labor force participation rate, which has been in steady decline since 2008 as discouraged, unemployed workers have given up their search for work and left the labor force, actually ticked up slightly this month to 63.6 percent from last month's reading of 63.5 percent.
Furthermore, the employment to population ratio rose 0.4 percent to 58.7 in September.
It's clear from the chart that the participation rate has had similar ticks upward in the past – and even in recent months – but what makes this month so significant is that the labor force participation rate held up even though the unemployment rate fell 0.3 percent to 7.8 percent.
That's no small move in the headline number, especially given that Barack Obama and Mitt Romney are in the final stretch of the presidential campaign, heading into the November 6 elections.
Contrast today's data, which saw the unemployment rate move down while the labor force participation rate held steady, with what Societe Generale economist Brian Jones predicted yesterday:
Meanwhile, the civilian unemployment rate is projected to move one tick lower to 8.0% – the lowest reading since the beginning of 2009 – but the forecast dip once again likely will be attributable to jobless persons opting out of the labour force. Total hours worked at private establishments probably expanded marginally, but merely ended Q3 at the June level. With retail price increases expected to eclipse nominal earnings gains, we expect little fuel for consumer spending from the BLS’ report. Those hoping for labour-market fireworks ahead of the 6 November national elections will have to look elsewhere.
That doesn't seem to be the case here.
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