US unemployment rate drops to 7.8%

5 Oct 12
The United States’ unemployment rate fell to 7.8% last month, its lowest level for more than three and a half years, according to the US Department of Labor.

By Nick Mann | 5 October 2012

The United States’ unemployment rate fell to 7.8% last month, its lowest level for more than three and a half years, according to the US Department of Labor.

The drop, from 8.1% in August, is the first time the rate has fallen below 8% since January 2009, when it was also 7.8%. It peaked at 10% in October 2010 but has generally shown a downward trend over the past three years.

Today’s data also show the total number of people out of work fell by 456,000 last month to 12.1 million. A total of 114,000 new jobs were created, below the monthly average for 2012 as a whole, of 146,000.

Alan Krueger, chair of US president Barack Obama’s Council of Economic Advisers, said the figures were further evidence the US economy was ‘continuing to heal the wounds inflicted by the worst downturn since the Great Depression’.

He added: ‘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 2007.’

Krueger called on Congress to extend the tax cuts for middle-class families, which are set to expire at the end of this year – part of the ‘fiscal cliff’ of automatic tax rises and spending cuts that will kick in in January unless Congress agrees a new budget. A think-tank warned this week that this would increase the tax bill for 90% of US households by an average of $3,500 next year.

Congress should also pass elements of the president’s American Jobs Act focused on infrastructure investment and preventing state and local government job losses, he said.

Andrea Saul, campaign spokeswoman for Mitt Romney, Obama’s Republican rival in next month’s US presidential election, claimed the president’s policies had ‘driven job creators out of business and increased layoffs’. She added: ‘If given a second term, President Obama’s agenda would destroy over 700,000 jobs and cost middle-class families as much as $4,000 in higher taxes,’ she said. ‘It’s unacceptable and Americans deserve better. As president, Mitt Romney will cut taxes for the middle class and reform our tax code to get millions of Americans back to work in good-paying jobs.’

Did you enjoy this article?

Related articles

Have your say

Newsletter

CIPFA latest

Most popular

Related jobs

Most commented

Events & webinars