The news was electrifying just one month before the election. Unemployment rate down to 7.8%! Decent gains in employment all around! After an August report so dismal it spurred the Fed into action with an open-ended round of mortgage buying, QE3, how could September’s come in so strong?
The answer is obvious to longtime readers of Barataria, since it was called when the August report came out. We’re seeing fluctuations caused by sketchy methods of calculating the state of jobs, a small number found by subtracting a big number from another big number. Indeed, the best part of the gain came from adjusting July and August up by 89k jobs total.
Underneath the big story is a much bigger story that is going unreported through this gradual turnaround. We are witnessing the printing of a strong bottom, a floor in the overall employment picture where we are roughly treading water. What makes this possible, and hard to report, is the net gain of jobs in unexpected places that the traditional survey is having a lot of trouble finding.