U6 Unemployment Rate Remains Above 14 Percent as More Job Seekers Sadly Give Up Looking for Work

Desperately looking for an “October surprise” after the ass-kicking he took during the Wednesday debate, President Obama couldn’t wait to tout the claim that the official unemployment rate hit its lowest number since taking office.

After a record 43-month stretch of unemployment north of 8%, the September unemployment rate fell to 7.8% for the first time since January of 2009, just one month before the 2012 election. Yet the underemployment rate remained unchanged from a month earlier, staying flat at 14.7% and the labor force participation rate also remained virtually unchanged at a 30-year low. A glaring oddity, especially considering that in 2012, job growth has averaged 146,000 per month – less than the average monthly gain of 153,000 in 2011.

So why the decline all of a sudden?

For starters, there was a flood of 582,000 part-time jobs. As the Labor Department noted in its jobs report Friday: “The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.”

Which is nothing new. In fact, most jobs created during the last four years have been temporary, part-time hires in a persistently weak economy where job seekers will take anything they can get.

Meanwhile, while a net 200,000 new jobs were created over the last two months, an additional 700,000 working age people (18-64) have given up looking for work during that same time and switched to welfare to make ends meet.

In fact, if the same number of people who have given up looking for work were still trying to find a job, the real unemployment rate today would be 10.7%. Obama also claimed that unemployment would be down to 5.6% today if Congress passed his $830 billion stimulus plan back in 2009, which Congress did.

Lastly, the one area that has seen consistent job growth over the last three months has been the public sector. Federal, local and state government spending added a net 10,000 jobs in September, and revisions in July and August showed an addition of 63,000 total government jobs according to the Bureau of Labor Statistics. Initial estimates claimed that government employment fell by 21,000 in July and 7,000 in August. Friday’s revisions show that those payrolls increased by 18,000 in July and 45,000 in August – the biggest increase in public sector hiring since the addition of temporary Census Bureau workers two years ago.

So between more people giving up looking for work, temporary hires and public sector growth, Obama was able to spin a slight dip in the official unemployment rate into a temporary victory lap. But I doubt families struggling to make ends meet, college graduates in the unemployment line or business owners forced to cut costs will notice. One number won’t be making any Americans feel recovery – even before an election.