The U.S. unemployment rate tumbled to 7.8% in September but a broader measure was flat at 14.7%.
The decline in the main unemployment rate was driven by positive factors. In previous months, the rate has fallen because more Americans were no longer looking for work. That wasn’t the case in September. The labor force increased, as more people were seeking jobs. Meanwhile, the number of unemployed tumbled by 456,000, while those with jobs surged 873,000.
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That number may come as a shock, considering that the number of jobs in the economy rose just 114,000 last month. That’s because the number of jobs added to the economy and the unemployment rate come from separate reports. The number of jobs added comes from a survey of business, while the unemployment rate comes from a survey of U.S. households. The two reports often move in tandem, but can move in opposite directions from month to month.
One possible explanation: The Labor Department revised up its estimate of payroll growth in July and August, but the unemployment rate doesn’t get revised. So it’s possible the big one-month drop in the unemployment really reflects improvements over the past two or three months.
via Why Did the Unemployment Rate Drop? – Real Time Economics – WSJ.
Source:
http://piratearian.wordpress.com/2012/10/06/why-did-the-unemployment-rate-drop-real-time-economics-wsj/