Unemployment Rate Plummets to 7.8%; Huge Revisions Cap Solid Third Quarter

The U.S. Labor Department Friday morning reported that the American economy added 114,000 jobs in September, roughly in line with economists’ expectations. But large upward revisions in numbers from July and August along with an unexpected spike in total household employment sent the unemployment rate down to 7.8 percent, the lowest rate since President Obama took office.

The Labor Department’s Bureau of Labor Statistics (BLS) said that July’s previous job gain estimate of 141,000 had been revised to 181,000 and that August’s 96,000 number had gone up to 142,000.

The BLS data also showed that labor participation rate increased in September, which normally would have driven the unemployment rate up given the lackluster job gains. But in its survey of households, BLS said that total employment skyrocketed by 873,000, an unexpectedly large jump that pushed down the unemployment rate.

With the revisions and the total number for September, the U.S. jobs picture became much less bleak in one day, with the last three months showing job growth above 100,000.

For the third quarter of 2012, monthly job creation averaged 146,000, up significantly from the 67,000 jobs created on average in the second quarter, but nowhere near the 226,000 jobs created per month in the first quarter of the year.

So far in 2012, monthly job creation has averaged 146,000, the same figure as in the third quarter.

The monthly job creation numbers are closely-watched by the political community as the U.S. Presidential election enters its final month. There will be one more jobs report before the election; October’s job number will be published Friday, November 2, four days before Election Day.