Unemployment falls to 7.8 percent

>> u.s. economic economist for the president.

>> definitely good news in the context of all the bad news in recent months. the headline growth of employment of 114,000 was good but not spectacular. if you dig deeper you find they revised up prior months so running around 150,000 per month, somewhat better not indicative of a economy going into recession, perhaps one getting a little tail wind to it. the drop in the unemployment rate from 8.1% to 7.8%, as you know, sometimes it drons for the wrong reason because people give up looking for work. that was not the case in september, 800,000 people by this measure of employment found jobs, one of the largest increases by that measure in the last eight or nine years.

>> mitt romney went after this on the stump today in virginia saying that more people were giving up and that the number of -- the unemployment number would be 11% if all the people who had given up had come back in. that's probably an accurate number but the point is that this month at least, in these data, it showed that people are not giving up, they're coming back into the work force .

>> that's true. if you look in the last year, the proportion of people who want to work or looking to work has gone down, but it did go up in the last month. i think that's important because in the last month or two we've seen sentiment indicators not just the stock market but surveys of confidence that people starting to feel a little better. maybe there is something out there happening on the ground that the data only now is just picking up.

>> manufacturing has been a weak spot. continues to be?

>> yes. it fell again in the month of september. and we know that also from other surveys of factory activity. up couple things going on here, europe is still in recession, china is slowing down and most of all the fiscal cliff. from what companies are saying they're reluctant to make big investments because they don't know if they sell to the federal government whether that customer will be around in january. they hear we might have a recession. the politicians can't agree on moving the cliff. we need to be cautious extrapolating september's good news to the rest of the year.

>> and from that perspective, the $64,000 political question is, what about that jobs number that is going to come out on the friday before election day ?

>> it's --

>> the last news people will get.

>> the flip of the coin. we don't know what's going to happen. this number surprised many ways. the number that came out a month ago --

>> which was weak.

>> was very weak. don't know how it's going to cut. most people's impressions of the economy, irrespective of what they hear the day before, are more or less fixed. nice headline to see the unemployment rate go down, but most people are looking around themselves and their communities to see if they feel better. a lot of sort of talk, a lot of smoke but i don't think it's going to fundamentally change the result.

>> one quick question about gasoline, because we've seen in california, maybe that's a leading indicator , has to do with the peculiar mix of state regulations, environmental regulations on gasoline refining, but that bump up is that going to be something that affects people in the pocketbook and affects the way they feel if we're seeing a surge in gasoline prices ?

>> definitely. a rise in gasoline prices is like a tax increase. however, what we've seen in this jobs report people are not only getting jobs, they're getting wage increases again. short-term trend, just the last month, but if that keeps up, and that should be more than enough to deal with some of the pockets of pressure you get from things like gasoline prices .

>> greg, thank you. it's great to always have you here on jobs day in particular.