2:19PM EST October 5. 2012 - The unemployment rate in September fell from 8.1% to 7.8%, the lowest since January 2009, as Americans benefited from a surge in part-time work, the Labor Department said Friday.
Employers added 114,000 jobs, about what economists expected, with health care and transportation and warehousing leading job gains.
Businesses added 104,000 jobs while federal, state and local governments added 10,000.
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The jobless rate fell sharply because it's calculated from a different survey than the official employment number. That household survey showed a robust 873,000 increase in employment and a 456,000 decline in unemployment.
However, many of those job gains were in part-time and self-employed positions.
The report is the government's next-to-last reading on employment before the presidential election and could influence undecided voters. The government will release October figures on Nov. 2, four days before the election.
One positive sign: The Labor Department revised up estimated job gains for July and August by a total 86,000. July's total rose from 141,000 to 181,000, while August increased from 96,000 to 142,000.
"It's continued improvement at a modest pace," Wells Fargo Chief Economist John Silvia said of the report.
Economists had estimated that employers added 115,000 jobs in September, including 129,000 in the private sector and 14,000 government job losses
There were some other bright spots behind the headline numbers. The average workweek rose to 34.5 hours from 34.4 hours. Employers typically boost the hours of existing employees before bringing on new staffers. And average hourly earnings jumped 7 cents to $23.58.
Also, the number of Americans out of work at least six months fell by 189,000 to 4.8 million. Yet these long-term unemployed still represent 40% of all of the jobless.
However, another barometer of future permanent hiring -- the addition of temporary workers -- was less encouraging. Employers cut 2,000 temporary workers.
And about two-thirds of the 873,000 increase in household-survey employment was in part-time jobs.
"We have to look at it as a qualified positive," says Patrick O'Keefe, former deputy assistant secretary at Labor and currently director of economic research at J.H. Cohn, an accounting consulting firm. "It can often lead to getting a more permanent" job.
Leading job gains was education and health services, with 49,000 net additions.
Governments, meanwhile, added 10,000 jobs, and employment for July and August was revised to show an increase of 63,000, up from a previous loss of 28,000 -- an encouraging sign for a beleaguered sector. Those are the largest gains since the U.S. Census inflated government payrolls in May 2010. State and local governments generally have been cutting jobs steadily since 2009.
Transportation and warehousing added 17,000; professional and business services added 13,000; leisure and hospitality, 11,000; and retailers, 9,400. Construction firms added 5,000 jobs.
Manufacturers, however, cut 16,000 positions.
It seems to just be a surge in part time work..