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US jobless rate falls to 7.8%, a 44-month low

The U.S. unemployment rate fell to 7.8 per cent last month, dropping below 8 per cent for the first time in nearly four years and giving President Barack Obama a potential boost with the election a month away.

twitter-logo Associated Press   Washington     Last Updated: October 17, 2012  | 17:52 IST

The U.S. unemployment rate fell to 7.8 per cent last month, dropping below 8 per cent for the first time in nearly four years and giving President Barack Obama a potential boost with the election a month away.

The rate dropped from 8.1 per cent because the number of people who said they were employed jumped by 873,000 - an encouraging sign for an economy that's been struggling to create enough jobs.

The number of unemployed Americans is now 12.1 million, the fewest since January 2009.

The Labor Department said employers added 114,000 jobs in September. It also said 86,000 more jobs were added in July and August than the department had initially estimated.

Still, many of the jobs the economy added last month were part time. The number of people with part-time jobs who wanted full-time work rose 7.5 per cent to 8.6 million, the most since February 2009.

But overall, Friday's report dispelled some fears about the job market. Average wages rose. And more people started looking for work.

The revisions show employers added 146,000 jobs a month from July through September, up from 67,000 in the previous three months.

The 7.8 per cent unemployment rate for September matches the rate in January 2009, when Obama took office. In the months after Obama's inauguration, the rate rose sharply and had topped 8 per cent for 43 straight months.

The decline in unemployment comes at a critical moment for Obama, who is coming off a weak debate performance this week against GOP challenger Mitt Romney.

The September employment report may be the last that might sway the remaining undecided voters. The jobs report for October will be released only four days before Election Day.

Speaking Friday in Fairfax, Va., Obama said the lower unemployment rate shows that the "country has come too far to turn back now."

Romney released a statement Friday pointing out that the number of jobs on employers' payrolls in September was lower than the revised 142,000 for August. He also noted that manufacturing has lost 600,000 jobs since Obama took office.

"This is not what a real recovery looks like," Romney said in a statement.

But Sal Guatieri, an economist at BMO Capital Markets, said the report signals improvement.

"An overall better-than-expected jobs report, consistent with most recent data that suggest the economy is gaining some momentum," Guatieri said in a note to clients. "The sizeable drop in the unemployment rate could lift the president's re-election chances following a post-debate dip."

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