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FRIDAY'S REPORT that the U.S. jobless rate for September had fallen to 7.8 percent means little in itself--the Labor Department announcement comes with enough asterisks to fill a steamer trunk--but numbers sometimes carry an import beyond themselves. In great part, the economy is psychology, and the breaching of the 8-percent barrier, for the first time since Barack Obama's swearing-in as president, may combine with other favorable data to give this stumbling economy a steadier gait.
Leading indicators of last month's 0.3 unemployment-rate gain include an upturn in car sales, which recently posted their strongest showing since March 2008; a seven-year high in home prices; and a rise in chain-store buying. These increases dovetail with recent reports of stronger consumer confidence. A late-September Wall Street Journal/NBC poll found 18 percent more Americans believing the economy was improving than not. Because 70 percent of the U.S. economy is based on consumer spending, these are hopeful signs heading into November and the Christmas shopping season.
Some glad tidings for working America also materialized. Anemic job-gain numbers for both July and August were revised, on fuller data, to ruddier sums: The third quarter saw creation of 437,000 net jobs (assuming a reliable September report). That's hardly a cure for what ails us--12 million Americans officially jobless with another 10 million stuck in part-time, no-benefits work--but it's something. At least private-sector workers are working more hours than in August, while labor-force participation, which had fallen steadily this year as frustrated job seekers left the labor market, stabilized. Stemming this dropout rate is another hint that perhaps the worst of the Great Recession/Pipsqueak Recovery is past.
TURNING THE KNOB
Alas, it's also true that focusing the microscope on some of these hopeful numbers and trends reveals a swarm of dystrophic asterisks:
* If September's 114,000 new-jobs datum holds up, it would represent 28,000 fewer jobs than were created in August and 67,000 fewer than in July.
* While total (versus net) employment rose by 873,000 jobs in September, a remarkable 67 percent (582,000) of those were part-time positions. Writing in Great Britain's left-leaning Guardian newspaper, business columnist Moira Herbst laments the trend of "more part-time jobs, many of them low-wage, taking the place of solid middle-class careers" and points to a National Employment Law Project study revealing that during the recovery job gains in low-wage occupations have grown three times as fast as those in middle- and higher-wage positions.
* Workforce attrition during the recovery makes the 7.8 percent jobless rate look better than it is. Had not hundreds of thousands of Americans simply given up trying to find a job, says Peter Morici of the University of Maryland, "we'd be at 9.7-9.8 percent unemployment."
* Only 19.3 percent of jobless Americans found employment in September, reports the Labor Department--a smaller percentage than during any one-month period of the recessions that began in 1990 or 2001. Meanwhile, according to a Wall Street Journal news story, 40 percent of the unemployed, or 4.8 million people, have been out of work more than six months. "Unemployed workers," states the Journal, "are now more likely to quit looking than to find a job."
* Even extracting the positives of the September jobs report and other hopeful trends, middle-class wealth has fallen sharply since the recession technically ended in June 2009, which further implicates the quality of jobs being created. "Real median household income is down [over the last 39 months] $3,040," editorializes the Journal. "The economy is growing but real incomes are still falling"--a conclusion that will surprise few on Main Street.
A BLOW DUCKED
Like the economy, politics is also in large part psychology. After last Wednesday's debate, we opined that Friday's jobs report could be the devastating finishing punch of a one-two combination rained upon President Obama by the week's events. That punch whizzed by the president's head.
Meanwhile, it's well to remember that America's economic woes are wrapped up in a global downturn that preceded the Obama presidency and may outlast it, even if it's eight years. Of course, wise government policies can help a given nation fare better. So can numbers that inspire confidence. Let's hope 7.8 is one of them.