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US jobless rate drops to 7.8% in September

The US unemployment rate last month fell to its lowest level in nearly four years, and employers added jobs for the 24th consecutive month as the economy continued its slow recovery from one of the nation’s worst recessions.

The jobless rate dropped sharply in September to 7.8 percent from 8.1 percent in August, falling to the lowest rate since January 2009, when President Obama took office. Unemployment that month was also 7.8 percent.

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US employers, meanwhile, boosted payrolls by 114,000 jobs, the Labor Department reported Friday. Additionally, the Labor Department revised its preliminary job estimates for July and August to show that employers added 80,000 more jobs than initially reported.

“It’s better than I expected,” Sung Won Sohn, an economics professor at California State University said of Friday’s unemployment figures. “The economy is not very strong, but I think we’re clearly rebounding from the spring doldrums and beginning to see a modest amount of strength.”

With just five weeks until the presidential election, the numbers have taken on added importance, with both Democrats and Republicans using them to reinforce very different visions of the economy. Stocks ended mixed on Friday.

The Dow Jones industrial average gained 35 points to close at 13,610. The technology-heavy Nasdaq Composite Index fell 13 to 3,136, while the Standard & Poor’s 500 index ended the day essentially flat, at 1,461.

While the employment report was generally viewed as positive by economists, job growth remains tepid. In a thriving economy, the nation adds 200,000 to 250,000 jobs a month, about double September’s gains.

Nigel Gault, chief US economist for IHS Global Insight, a Lexington forecasting firm, said the slow rate of hiring reflects businesses’ uncertainty about the outcome of the election and the potential tax and policy implications, as well as concerns about Europe’s economic crisis.

“We haven’t gotten into a situation where all the cylinders are firing,” Gault said.

Paul Hewins, a general manager in Skanska USA Building’s Boston office, said he has seen an uneven pick-up in construction activity across the country.

The company is hiring in Massachusetts and a number of states, including Texas, Florida, California, and New York. In Massachusetts, colleges, hospitals, and some private sector projects are underway and the company expects to hire more than two dozen people by the end of the year. Hiring has been flat, however, in Georgia, Michigan, and New Jersey

“We’re doing very well in Boston, and nationwide we’re good, but there are pockets that reflect the economy,” he said.

The unusually big drop in the jobless rate was driven by a surge in employment last month: More than 800,000 more people reported themselves as employed, according to the Labor Department. Most of this increase in employment was the result of people working part time.

That jump led some Republicans and others to suggest the Obama administration had manipulated the statistics in advance of the election. On Twitter, former General Electric chairman Jack Welch wrote “Unbelievable jobs numbers . . . these Chicago guys will do anything . . . can’t debate so change numbers.” Welch could not be reached for further comment.

Officials at the Bureau of Labor Statistics defended the report, saying there are no political appointees involved in its production or analysis.

“They don’t have a hold on anybody here — nobody here is Obama’s man,” said Martin Kohli, chief regional economist for the bureau.

The surge in employment called attention to the government’s method for determining unemployment and growth. The Labor Department uses two surveys, one of employers, to estimate payroll employment, and the other of households, to estimate unemployment. The two don’t always correlate.

Kohli said the bureau calculates the unemployment rate by calling a sample of 60,000 households each month and asking if its members “worked for pay or profit.” If a person has worked just one hour, they are counted as employed.

John E. Silvia, chief economist for Wells Fargo & Co. in Charlotte, N.C., said he finds the employer survey numbers to be more reliable, but that he does not see evidence of a conspiracy in Friday’s report.

He said he suspected September’s rise in part-time employment was due to college students returning to school and taking part-time jobs.

The question that has confounded many economists, he said, is whether the sluggish rate of job growth that the nation has experienced for the last three years is now the “new normal.”

“Things are getting better, the economy is continuing to improve and people are getting jobs,” Silvia said. “The challenge we all have is the economy’s just not growing the way we had expected.”

Megan Woolhouse can
be reached at
mwoolhouse@globe.com.
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