I agree with most of the commenters, Either the jet is clogged, or not large enough for this engine. Ream it out just a thousand or so and it will run much better.
I think it's the size of the carb jet. Check for intake leak (bad gasket), check fuel tank vent which is usually in the fuel cap. Sometimes cap vent gets plugged with dirt. Try removing the fuel cap with it running, to see if that is the problem. If all else is good, drill the main metering jet larger by a few thousands…
Thats your low speed jet. The engine is old and worn in so it needs more fuel. You have to enlarge the size of the hole in the low speed jet a little.
I had the same issue with my old Generac PP5000T generator. I replaced the carb with one from a Tecumseh HMSK-100 that has adjustable jets and also has the cold weather primer bulb because it was impossible to start in cold weather. I also moved the location of the governor spring to put a bit more tension on the linkage and that seemed to eliminate the surging. It now runs better then it ever has. Not bad for a 20 year old gen-set.
All right did is tighten the screw between the chocked and throttle till it stoped jumping runs fine now
Change the petcock. It's starving for fuel. Also check the high speed needle on the bottom of the fuel bowl. I have the same generator and I had a time with it. Runs great now.
Mine was doing the same thing with a new Chinese carburetor. I got the choke all the way open then it runs fine.
I have the same motor and the same carb it's a savior Chinese carb for a Tecumseh hm100 move the choke lever towards choke position very slowly until the motor runs smooth u will notice the motor run way better and not surge up and down the cause is …..main jet is too small and lacks fuel supply because of EPA standards and causes it to run lean. not enough fuel too much air. move choke over slowly … boom shocka locka runs perfect. I used a dremel and notched a spot on carb lever for spring to catch in correct new spot
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