The American economy added 114,000 new jobs last month. However, about 90,000 of those jobs were needed just to keep up with population growth, so net job growth is closer to 24,000 jobs. The chart below, which I update monthly, shows net job creation since the beginning of 2008. Those of you with sharp memories will note that the past three months look bluer than they used to. This is because the BLS revised its July and August estimates upward. It’s still nothing to write home about, but job creation over the past few months has been a bit healthier than it initially looked.
Politically, this jobs report has something for everyone. The Romney will camp will correctly point out that the recovery remains pretty sluggish. The Obama camp will correctly note that the unemployment rate has now fallen from 9.0% to 7.8% over the past year. The Romney camp will correctly point out that the payroll survey (see chart below) doesn’t suggest job creation is really all that robust right now. The Obama camp will simply be happy that the headline unemployment number went down a bunch and the Romney team can no longer chirrup endlessly about “xx straight months of unemployment above 8%.” You should feel free to adopt your own talking points accordingly.
UPDATE: I originally said that the unemployment rate had gone down partly because people were dropping out of the labor force and therefore no longer being counted as unemployed. That was true last month, but not this month. Sorry about that. I’ve corrected the post.
