October 2012 Economic and Market Overview

The recent unemployment data showed a decline in the jobless rate from 8.1% to 7.8%, but this is no reason to become optimistic. This data is most likely an anomaly due to statistical errors, and will probably move back to the 8.0% mark in coming months.

No, it is not as Jack Welch has claimed. The BLS did not manipulate the data by any more than it already does in order to give Obama a boost in ratings after a so-called poor debate performance against republican presidential candidate Mitt Romney (for those of you who choose to waste time on these fruitless Hollywood productions).

The drop in the reported jobless rate represents the lowest mark since January 2009 as the result of a reported 873,000 increase in employment. The Establishment Survey showed a gain of only 114,000 new jobs for the month. Meanwhile, the prior two months’ numbers were revised upward by a total of 86,000. Therefore, over the last three months, the average rate of job growth comes to 146,000, which basically keeps pace with the relatively low level of population and economic growth. As has been the case since the official end of the recession, at the current rate of job growth, it will take about a decade to reach a full employment situation.