The political noise and controversy around September's reduction in the unemployment rate to 7.8% is overshadowing a very important point. Traditional job growth was anemic (only 114,000), but the jump in contingent workers was huge.
The contingent workforce - working folks who don't have a traditional full-time job - increased by over 700,000 in September. This is why the unemployment rate fell.
It's also likely this will be restated downward in the coming months. Although the idea that the highly professional civil servants at the BLS cooked the books is just plain silly, the nature of surveys means errors do occur and I think it's likely this is one of those cases (see this NY Times article for an explanation).
Here's how I get to 700,000:
1. The number of people employed part-time for economic reasons (couldn't find full-time work, hours cut, etc.) jumped 582,000. This is a pretty stunning one month increase and resulted in the total number in this category to increase from roughly 8 million to 8.6 million.
2. Unincorporated self-employment increased 144,000. This, by itself, is more than the increase in traditional jobs in September.
3. Incorporated self-employment fell a bit, but for reasons too long to explain here incorporated self-employment is treated differently by the BLS. Because of this, I think it was more or less flat. See this post for more detail.
4. Temporary service employment was essentially unchanged in September.
Adding this up, I get to a contingent worker increase of 726,000.
As I said, I expect these numbers to be revised. But even so, this illustrates the continued structural shift from traditional to contingent employment.
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