A modest pick-up in job growth last month helped lower the nation's
unemployment rate to a 4-year-low of 7.8 percent -- exactly where it was when
President Obama took office nearly four years ago, the Labor Department
reported Friday morning.
In the second-to-last jobs report before the Nov. 6 election, businesses said they hired another 114,000 workers during the month, and the department increased its estimate of the number of new openings in the previous two months by 86,000 --bringing the average monthly gain for the year to a healthy 146,000 a month. The overall jobless rate declined from 8.1 percent the previous month.
The report suggests the economy is staging a minor revival this fall after a slump during the summer. It comes at an opportune time for Mr. Obama, providing modest support for his re-election bid at a time when his widely criticized performance in a debate with Republican candidate with Mitt Romney this week was giving new energy to the GOP challenger's campaign
"This is an overall better-than-expected jobs report, consistent with most recent data that suggest the economy is gaining some momentum," said Sal Guatieri, economist at BMO Capital Markets. "The sizable drop in the unemployment rate could lift the president's re-election chances following a post-debate dip."
Consumers appear to be driving the pick-up in jobs, as employment and production in business-driven and export-driven manufacturing industries continue to decline.
The healthiest job gains were in health care and transportation. Credit intermediation also saw a sizable 6,000 new openings, likely owing to the revival in the housing market and a wave of mortgage refinancings this year.
Rich Milgram, founder of Beyond.com, an online network for job-seekers, said consumers appear more optimistic about the economy than businesses right now. More than 60 percent of consumers said the job market is improving in their areas in a recent survey by the network.
"While job seekers are hopeful, businesses are more tentative, taking a wait-and-see approach to hiring," he said, suggesting that businesses are more fixated on the uncertain policy environment in Washington.
"With new policies potentially on the horizon, the post-election environment will have a significant impact on the number of immediate opportunities available to the U.S. workforce," he predicted.
Voters' political preferences appear to be influenced by their job status, according to the survey. A majority of the 92 percent of workers who hold jobs prefer Mr. Obama, while the bulk of the nearly 8 percent of workers who are unemployed prefer Mr. Romney.
The Labor Department found that many workers recently found part-time jobs last month rather than full-time work, or became self-employed, helping to draw down the unemployment rate. More than 400,000 workers re-entered the labor force during the month and more than 800,000 found employment -- reversing a recent trend of workers dropping out because they couldn't find jobs.
Wage gains also picked up modestly during the month, bringing the yearly average growth in hourly earnings to 1.8 percent -- up from a low of 1.3 percent earlier this year.
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