Trends Still Murky But Positive U.S. Jobs Numbers Drive Dow To 5-Year High

Good news on the U.S. jobs market led to a rally for the Dow Jones Industrial Average.

The U.S. unemployment rate in September fell from 8.1% to 7.8%, the lowest since January 2009. More Americans found part-time work, helping to account for the decline, the U.S. Bureau of Labor Statistics Labor announced Friday, 5 October 2012.

Employers added 114,000 jobs, about what economists expected. Businesses added 104,000 jobs. Federal, state and local governments added 10,000. Health care and transportation and warehousing business added the most jobs.

Stock Market High On Jobs News

On whiff of positive jobs news and the stock market became exuberant. The Dow Jones Industrial Average closed at five-year high of 13,610.15.

Positive jobs news drove the Dow to 5-year high

The jobless rate fell sharply in part because the Bureau of Labor Statistics calculates it from a different survey than the official employment number. The official employment household survey showed an increase of 873,000 jobs and a drop of 456,000 in unemployment.

The report is the government’s next-to-last reading on employment before the presidential election and could influence undecided voters. On 2 November 2012, four days before the election, the government will release October’s employment figures.

The BLS revised upward the estimated job gains for July and August by 86,000. July’s total increased from 141,000 to 181,000, while August rose from 96,000 to 142,000.

The outlook for future job growth remains mixed.

Employers cut 2,000 temporary workers. Many of the job gains were in part-time and self-employed work. About two-thirds of the 873,000 jobs gained the in employment household-survey was part-time work.

Exports are slowing due to uncertainly about the European debt crisis and recession. China’s rapidly growing economy is slowing.

Rising gasoline prices are hurting consumer spending. Economic growth has been at an annual pace of less than 2%. Some economic analysts are worried that the U.S. economy could fall back into recession.

However, September car sales were strong. Several recent reports indicate the housing market is improving.

A clearer picture of the job situation may emerge once the November U.S. elections are over.