Steep drop in jobless rate has some Obama foes crying foul

WASHINGTON — The unusually steep drop in the U.S. jobless rate just weeks before the presidential election has sparked howls of protest from some conservatives that the White House cooked the books to boost President Obama’s chances.

The outcry began Friday morning on social media just minutes after the federal Bureau of Labor Statistics announced that the September unemployment rate had plunged to 7.8% from 8.1% in August. And the debate raged throughout the day on talk radio and cable TV about whether Americans had gotten jobbed on the latest jobs report.

Obama administration officials strongly denied any manipulation. A former chief of the bureau, an independent agency under the Labor Department, said it would be impossible to fabricate the figures because of the large number of people — mostly civil servants and not political appointees — involved in compiling the tightly guarded data.

“I think it would be impossible to really manipulate the numbers,” said Keith Hall, who was the bureau’s commissioner from 2008-12. “Certainly, it would be impossible to manipulate the numbers and not be found out.”

Still, the conspiracy theory gained traction early when Jack Welch, the widely respected former chief executive of General Electric, asserted on Twitter that the fix was in to give Obama a boost following what many analysts said was a poor debate performance Wednesday night.

“Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change number,” Welch tweeted. He did not return a call seeking comment.

Welch was joined throughout the day by other conservatives, including Rep. Allen West (R-Fla.), in alleging a conspiracy to rig the results of the monthly household survey, one of two measures of employment taken each month by the Bureau of Labor Statistics.

The conspiracy theorists, dubbed “jobs truthers” by Obama supporters, said it was suspicious that the unemployment rate dropped below 8%. Until Friday, Republicans had trumpeted that the rate had been above 8% for 43 straight months, the longest such stretch since the agency began tracking the figure in 1948.

“I agree with former GE CEO Jack Welch, Chicago-style politics is at work here,” West posted on his Facebook page, calling the situation “Orwellian.” “Somehow by manipulation of data we are all of a sudden below 8% unemployment, a month from the presidential election.”

Rick Manning, who was the public affairs chief of staff for the Labor Department from 2006-09, said the sharp drop in the unemployment rate didn’t line up with the modest 114,000 new jobs reported from the bureau’s so-called establishment survey of businesses.

“I don’t know how that data got jimmied, but it sure looks like it because the timing is suspicious at best and the numbers don’t add up when looking at all the other data,” said Manning, now the communications director for Americans for Limited Government, a free-market group.

Labor Secretary Hilda Solis said she was “insulted” by the suggestion the administration messed with the employment data. And Jan Eberly, assistant Treasury secretary for economic policy, called the conspiracy theories “simply absurd.”

“The BLS has a staff of career professionals who are committed to accurate measurements and accurate economic statistics,” she said.

The drop in the unemployment rate in September was the largest one-month decline since May 2010, when the rate dropped to 9.6% from 9.9%, after the economy added 516,000 new jobs.

But the unemployment rate is calculated independently from the job-growth figure.

To determine the rate, Census Bureau employees survey about 50,000 people each month — mostly over the phone but sometimes in person — to determine if they are employed, Hall said. Dozens, if not hundreds, of people are involved in collecting and compiling the data for the monthly household survey, he said.

Those figures are more volatile than the monthly establishment survey figures on job growth, which are compiled from records of about 400,000 businesses, he said.

But the household survey can be an early indicator of changes in the jobs market because it takes a while for new businesses to be included in the establishment survey. In addition, the household survey counts self-employed people, who do not show up in the establishment survey compiled from business payroll insurance records.

“At turning points, sometimes the household survey turns a little quicker than the payroll survey does,” said Hall, a senior research fellow at the Mercatus Center at George Mason University. “It doesn’t mean it doesn’t give out false signals.”

Hall, who was appointed by former President George W. Bush and served through much of the Obama administration, said the job is not a political position.

The commissioner serves a four-year term and is not replaced by an incoming president, as the heads of Cabinet departments and other agencies are. During his term, Hall said he was never asked by the Bush or Obama White House to change any data.

“I feel like I’m a certified economic geek rather than a political person,” Hall said.

jim.puzzanghera@latimes.com