An explanation of the Septemberunemployment rate and the effect the so-called fiscal cliff could have on credit union performance are thehighlights of the NCUA's October economic video update, released bythe regulator Monday.

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NCUA Chief Economist John Worth opened the video with good newsabout the economy, but added that recovery continues to be slow,and “important risks are looming.”

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Compared to a year ago, Worth said, the economy has picked up1.8 million jobs overall and about 1.9 million private sector jobs.In September, the unemployment rate dropped to 7.8%, its lowestlevel since January 2009.

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The economist acknowledged the controversy surrounding theunemployment figure, in which conservatives accused the Bureau ofLabor Statistics of tampering with the numbers to benefit PresidentObama's reelection bid.

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Worth explained the difference between the two surveys thatcontribute to employment statistics – the payroll survey, in whichemployers are asked about jobs, and the household survey, in which60,000 households are asked about employment – and how thosedifferences in coverage can produce different results.

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Worth said the fiscal cliff, which would result from a largeincrease in taxes and spending cuts scheduled to take place in2013, is also expected to take a dramatic toll on the economy, ifit occurs.

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The video notes that credit union performance would likelyworsen as the economy contracted and unemployment rose as a resultof these changes. Credit unions with ties to the federal governmentcould be affected even more significantly.

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The video is available on NCUA's official YouTube channel.

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