But the Heritage Foundation analyzed the figures and concluded the reported “drop in the unemployment rate is inconsistent with other economic indicators and may represent statistical sampling error.”
There was slow growth in hiring reported by employers, a net 114,000 new jobs, but the household survey had an increase nearly eight times higher, resulting in the jobless rate dropping 0.3 percent to 7.8 percent. Heritage pointed out that the surveys are samples and, like political polls, have margins of error.
Holding back growth, the foundation noted, was a sharp decline in employment by startup companies, now at a record low – and very bad news since this is the major job generator in America. Reasons for the lack of hiring by new businesses: “Impending tax increases make it more risky to hire, and excessive regulations make it more expensive to start up new businesses,” Heritage said. “Congress and the Administration should reduce barriers to starting a business instead of increasing them.”
There are other negative features of the unemployment picture presented by the government agency. Of the 114,000 new jobs reported in September, 10,000 were created by government, and most of the revised 86,000 new jobs for July and August came from the government. Still another troubling part of the report was a drop of 16,000 jobs in contracting in manufacturing for the second month in a row.
And the number of people working part-time jobs and wanting full-time work increased 7.5 percent to 8.6 million, the biggest jump since February 2009. There was little change in the number of long-term unemployed (out of work 27 weeks or more) at 4.8 million, or 40 percent of the unemployed.
Still another gauge of the weakness of the economy, involuntary part-time workers – employed part-time for economic reasons – increased from 8.0 million in August to 8.6 million in September. This group includes individuals working part-time not out of choice but because their hours were reduced or they couldn’t find full-time jobs.
Then add the 2.5 million unemployed designated as “marginally attached to the labor force.” They were not in the labor force, the BLS said, but “wanted and were available for work and had looked for a job sometime in the prior 12 months.” Why weren’t they counted as unemployed? “Because they had not searched for work in the four weeks preceding the survey.” Add another 1.7 million “marginally attached” who didn’t look for jobs in the four weeks prior to the survey “for reasons such as school attendance or family responsibilities.”
Add up all the numbers and the rate nearly doubles 7.8 percent. U.S. News & World Report says the government’s own U-6 measure, including the “unemployed, underemployed, too discouraged to look for work or ‘marginally attached’ to the labor force,” shows a 14.7 percent rate.