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Jobless rate at 7.8%; skeptics cry foul

Oct. 5, 2012 at 5:03 PM   |   Comments

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WASHINGTON, Oct. 5 (UPI) -- President Obama said Friday's U.S. unemployment report shows the economy is "moving forward" but a former General Electric head called the data "unbelievable."

The U.S. Labor Department reported the economy added 114,000 jobs in September and the unemployment rate fell to 7.8 percent, its lowest level since early 2009.

"Today, I believe that as a nation we are moving forward again." Obama said at a campaign rally in Fairfax, Va. "Now after losing about 800,000 jobs a month when I took office, our businesses have now added 5.2 million new jobs over the past 2.5 years."

Obama said "too many middle class families are still struggling to pay the bills." He said the Labor Department report "is not an excuse to talk down the economy to score a few political points."

Republican presidential nominee Mitt Romney released a statement saying: "This is not what a real recovery looks like. We created fewer jobs in September than in August, and fewer jobs in August than in July, and we've lost over 600,000 manufacturing jobs since President Obama took office."

Romney said the results of Obama's "failed policies are staggering" and promised if he is elected the country "will have a real recovery with pro-growth policies that will create 12 million new jobs and rising incomes for everyone."

Alan B. Krueger, chairman of the Council of Economic Advisers, said in a statement released by the White House, "While there is more work that remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression."

There was skepticism about the Labor Department report from Obama administration critics.

Doug Holtz-Eakin, a former director of the Congressional Budget Office (2003-05) and an adviser to the 2008 presidential campaign of U.S. Sen. John McCain, R-Ariz., told Fox News: "This must be an anomaly. It is out of line with any of the other data ..."

Some critics echoed a suggestion by former General Electric Co. Chief Executive Officer Jack Welch, who sent out a Twitter post all but accusing the White House of rigging the figures to help Obama's re-election campaign.

"Unbelievable job numbers ... these Chicago guys will do anything ... can't debate, so change number," Welch wrote in a post on Twitter.

Questioning the data and intimating it was rigged are "utter nonsense," White House spokesman Josh Earnest said.

"Anybody, any serious person who has any familiarity with how these numbers are tabulated understands that these are career employees at the Bureau of Labor Statistics that are responsible for compiling and analyzing these numbers and they do that on their own," Earnest said.

Former White House economic aide Austan Goolsbee posted a Twitter note: "love ya, Jack, but here you've lost your mind."

In an interview with Fox News Channel Friday, Welch said it was "ironic the assumptions came this way the month before the election."

"You draw your own conclusions," he said.

He told The Wall Street Journal Friday he was "doing nothing more than raising the question."

U.S. Rep. Allen West, R-Fla., was emphatic, telling CBNC he is "absolutely" convinced the Obama administration is manipulating the data.

"I'm very questionable of what we do see coming out of this administration because the numbers don't add up," West said. "Something is inconsistent here and that is what I'm questioning."

The job market and unemployment rate have been a focus of the presidential campaign and of Washington lawmakers and policymakers.

Obama and other Democrats said that the economy has added jobs for 31 straight months. Romney and his allies have said that, until the report that came out Friday, the unemployment rate remained at more than 8 percent for more than 40 months, and blamed the administration.

The Labor Department report said 12.1 million people were unemployed, a drop of 456,000 from the previous month.

That figure is critical because 342,000 more people dropped out of the workforce than gained employment in September. The September rate fell to 7.8 percent in part because it reflected an increase in the number of jobs initially reported in July and August.

Although the number is officially described as representing people who elected to care for a relative at home or return to school, many did so because they were simply too discouraged to continue looking for work.

The Labor Department said the number of people out of work for five weeks or less fell 302,000 to 2.5 million, a figure backed up by third-quarter layoff announcements, which were the lowest since the second quarter of 2000, Challenger, Gray & Christmas announced.

The department said gains were posted in healthcare, which added 44,000 jobs, and transportation and warehousing, which added 17,000 jobs. The financial sector added 13,000 jobs but manufacturing lost 16,000 positions in September.

The average workweek rose by 0.1 hours to 34.5 hours in September. Time on the clock at manufacturing firms also rose by 0.1 hours to reach 40.6 hours.

Earnings were up by 5 cents to an average hourly wage of $19.81 per hour, the department said.

Two other responses to the latest unemployment report:

-- Chris Williamson, chief economist at research firm Markit Economics, said, "The average payroll gain of 146,000 seen over the past three months is surprisingly strong given other economic data for the quarter, such as factory orders and the Institute of Supply Management and Purchasing Management Index surveys, which have pointed to a growth slowdown."

-- University of Maryland economics Professor Peter Morici called the September job gains "uninspiring" and said, "In the weakest recovery since the Great Depression, the nearly entire reduction in unemployment from its 10 percent peak ... has been ... through a significant drop in the percentage of adults participating in the labor force."

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