The big story in today’s jobs report is the unemployment rate falling to 7.8%, which happened because there was a +873K reading on the household survey.
Remember, there are two jobs surveys. There’s the Establishment Non-Farm Payrolls report, which surveys businesses, and the household survey, which surveys households, the latter of which is always more volatile.
So by the latter survey, we got 873K new jobs, and the unemployment rate fell by three tenths of a per cent from 8.1% to 7.8%.
And this makes sense in light of other data we’ve seen this month.
For example, car sales are historically closely associated with job creation, since people don’t buy new cars unless they have jobs.
And car sales came in at their best level since the crisis (note that the spike in the middle was cash for clunkers).
Here’s a chart showing the tight relationship between car sales and the unemployment rate.
Combine it all, and it’s clear: In September, if you asked households about they economy, they would say that more of them were employed, more had cars, and more felt much better about the economy.