The drop in the unemployment rate in September — from 8.1% to 7.8% — should not have been a gigantic surprise.
As we reported before, the number is consistent with a lot of other September datapoints, including monthly auto sales, which came out earlier this week, and were at the highest level since the crisis, at nearly a 15 million annualized adjusted rate.
And as you can see from this chart, there is a LONG history of the unemployment rate (red line) moving in tandem with car sales.
And that makes total sense. People don’t buy cars if they don’t have a job.