“It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December of 2007," said Alan Krueger, chairman of the Council of Economic Advisers, in a statement.
But Romney said the downward trend in job creation for the past three months is distressing. “This is not what a real recovery looks like,” he said in a statement. “If not for all the people who have simply dropped out of the labor force, the real unemployment rate would be closer to 11 percent.”
The divergence between the unemployment rate falling and new jobs created is the result of two different surveys. The new jobs part is called the establishment survey, which is derived from questioning businesses about their hiring. The unemployment rate is derived from what is called the household survey, which involves calls to about 50,000 people to ask their job status.
From the household survey, the Bureau of Labor Statistics found that 873,000 people said they had found work. After estimating the number of people who got fired or laid off, the BLS, using that survey, found that the number of unemployed people had dropped by 456,000.
The household survey sometimes picks up small-business hiring that is not captured in the establishment survey. But Mr. Naroff cautions that this particular statistic is volatile. “This is not a normal jump. It might overestimate what might have been done in any given month,” he says. “It is the pattern that is more important.”
The pattern over the past three months shows job creation is eroding. In July, the economy created 181,000 jobs and in August it created 142,000. Then, in September it dropped to 114,000 jobs.
Naroff says the reason for the dropoff is that businesses are beginning to pull back in advance of the uncertainty over the budget standoff in Washington. “We know people are still buying motor vehicles and going to department stores,” he says. “But business does not want to hire until Washington gets fixed.”