Dow hits 5-year high as unemployment rate dips below 8%

The Dow Jones Industrial Average climbed 83 points today to 13,658, its highest point in five years, with the news that the U.S. unemployment rate fell to 7.8 percent in September, dropping below 8 percent for the first time since January of 2009.

The rate declined from 8.1 percent in the previous month because the number of people who said they were employed soared by 873,000.

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

- Advertisement -

The U.S. Labor Department said employers added 114,000 jobs in September. It also said the economy created 86,000 more jobs in July and August than the department had initially estimated.
Wages rose in September, and more people started looking for work.

The labor force grew by 418,000 people, so the drop in the unemployment rate was not due to people giving up on looking for work.

The public sector finally stopped shedding jobs, as state, local, and federal government added a combined 10,000 jobs. Revisions show that the public sector created jobs in both July and August.
Average hourly earnings rose 7 cents to $23.58. Average hourly earnings have risen by 1.8 percent over the last year.

- Advertisement -

William Delwiche, an investment strategist at Robert W. Baird & Co. Inc., said while it’s good to see the unemployment rate come down, many of those who found jobs are underemployed or working part-time.

“I’m kind of skeptical of the decline,” he said. “Even though people are finding jobs, based on this month, it’s not the type of job they ultimately want to have or as much work as they ultimately want to have.”

This is one step in the right direction, but more improvement is needed for the market to have long-term confidence, Delwiche said.

“I think it’s kind of a wait and see,” he said. “If this is a meaningful improvement, then we’ll see it in the Establishment Survey data. So far, the pace this year in terms of jobs being added to the economy is slower than it was last year, so we’d like to see some meaningful and protracted improvement in the number of jobs added.”

Responding to the new data on Twitter this morning, ManpowerGroup chief executive officer Jeff Joerres wrote, “This is exactly what #ManpowerGroup’s own forward-looking research tells us. Trend of steady but cautious hiring in the U.S…. Through the end of 2012, employers tell us they intend to continue to hire at a steady pace, strongest 4Q outlook in 5 years.”

Gains in Milwaukee area business activity indicators remain modest, as 12 of 23 indicators registered improvement in August vs. year-ago levels, according to the Metropolitan Milwaukee Association of Commerce (MMAC) Economic Trends report issued today.

August’s 12 improvements were up from the revised 11 upward pointing indicators registered in July.

“The lackluster job picture continues to hold back broad-based economic growth in the metro Milwaukee area,” said Bret Mayborne, the MMAC’s economic research director. “Yet there are signs among selected indicators in manufacturing, real estate and auto sales suggesting that fuller economic growth is possible in the near-term.”

Sign up for the BizTimes email newsletter

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

What's New

BizPeople

Sponsored Content

BIZEXPO | EARLY BIRD PRICING | REGISTER BY APRIL 15TH & SAVE

Stay up-to-date with our free email newsletter

Keep up with the issues, companies and people that matter most to business in the Milwaukee metro area.

By subscribing you agree to our privacy policy.

No, thank you.
BizTimes Milwaukee