A Great Jobs Report for Obama, One More to Go

President Barack Obama probably couldn’t have asked for a much better jobs report as he heads into the final stretch of his campaign to stay in office. There's no guarantee, though, that his luck will hold in early November.

The good news wasn't in the headline jobs number -- the September increase in nonfarm payrolls of 114,000 brings the three-month average to 146,000, just about enough to offset natural growth in the labor force. The big surprise came from the separate survey of 60,000 households, which showed a drop in the unemployment rate to 7.8 percent, the lowest level since Obama took office in January 2009.

The details -- Jack Welch's accusation of manipulation notwithstanding -- were even more encouraging. The drop in the unemployment rate was driven by an increase of 873,000 in the estimated number of employed -- the largest jump since January 2003. That was enough to absorb a 418,000-person increase in the labor force and cut the number of officially unemployed by 456,000, according to the household survey.

Still, there's plenty of room for reversal. Because it relies on a smaller sample, the household survey is considered less reliable than the establishment survey, which produces the payrolls number. The margin of error for the number of employed is about 400,000 jobs. So some of the sudden decrease in the unemployment rate could prove ephemeral when the next jobs report comes out Nov. 2, just four days before the election.

Obama has one reason for optimism: Federal Reserve Chairman Ben Bernanke has been pushing harder to get companies hiring. As Bernanke put it in a speech in Indianapolis on Monday, the central bank plans to keep rates low even after the economy strengthens, a strategy he hopes will make people and businesses "more willing to invest, hire and spend." That's very different -- and much more powerful -- than the Fed's previous message, which was that it would keep rates low unless the economic outlook changed.

If employers are paying attention, the next jobs report could be a positive one, too.

(Mark Whitehouse is a member of the Bloomberg View editorial board. Follow him on Twitter.)

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