With job creation at the center of the U.S. presidential race a month ahead of Election Day, the Labor Department reported Friday that U.S. employers added 114,000 jobs in September and the unemployment rate unexpectedly fell to 7.8 percent, the first time the rate dropped below 8 percent in three years.
Harry Holzer, public policy professor at Georgetown University, said Friday's report had "some bright spots" after months of stagnant or deteriorating unemployment numbers.
This time, the improvement was not due to people dropping out of the workforce but "actually reflects a substantial increase in employment," Holzer said.
Economists expected about 113,000 jobs to be added, according to Bloomberg. Job additions have lagged behind expectations for the past six months as the unemployment rate had stayed above 8 percent for 43 months in a row. This marks the first time the jobless rate has fallen below 8 percent since January 2009.
The labor force participation rate rose slightly to 63.6 percent in September from 63.5 percent in August. However, Holzer said "the increase in the participation rate was not quite enough to be statistically significant."
Peter Morici, professor at the University of Maryland's Robert H. Smith School of Business, wrote in a note that the jobs added were still "not nearly enough to keep pace with population growth."
August's unemployment rate had fallen to 8.1 percent, driven by people who are dropping out of the labor force. However, in Friday's report, the Labor Department revised upward its figures for July and August. Employers had actually added 142,000 jobs in August, revised up from the 96,000 jobs announced last month. July's figures were revised upward to 181,000 jobs added from 141,000.
The three-month average of jobs added in the third quarter was better than many analysts had predicted at 145,000, Holzer said.
However, Holzer, author of the book "Where Are All the Good Jobs Going," said that without a major surprise, he didn't expect Friday's unemployment figures to sway voters.
"People have made up their minds that it's a tepid recovery and a difficult situation while it's not at all clear that a challenger will provide a better alternative," Holzer said.
He said many people see the "performance of a president who hasn't been that great and a challenger who may be riskier."
But Holzer applauded Romney's debate performance on Wednesday night and said, "If he has a few more debate performances like that, then the election is in play."
The Labor Department will release October's jobs report on Nov. 2, days before election day.
Holzer said he had anticipated that the U.S. had been on a flat trajectory for job growth as has been the case the last six months.
September's ADP Employment Report showed that that the private sector added 162,000 jobs, higher than analysts had predicted. ADP adjusted its August numbers down by 17,000 to 156,000 jobs.
Holzer said the slowdown in economic growth, shown by the last revision in second-quarter GDP announced last week, was one indicator. The Commerce Department announced that GDP had grown at a pace of 1.3 percent for the second quarter, a downward revision.
Holzer said economic figures do not indicate the third quarter will show a dramatic change from the previous quarter.
"Housing seems to be firming up a little bit and that's good," he said.
Last week, the S&P/Case-Shiller home price index showed prices had edged up by 1.6 percent for the month of July.
Other sectors, such as durable goods and manufacturing, have been weak, however.
Friday's unemployment report showed employment in many sectors showed little change, including government, construction, retail trade and leisure and hospitality.
Meanwhile, a slowdown in Europe and China has hampered U.S. exports.
"When you put everything together, housing is a brighter spot, but other things don't suggest any new momentum going forward. Like many people, I'm expecting the market to remain in the state that it's been. We'll keep treading water."
Holzer said the growing strength in the housing market may lead to a stronger recovery of construction jobs, which along with manufacturing, have been hard hit by the recession.
"It's hard to tell how much of that is permanent or not," he said. "Virtually nothing is bounced back in construction. We won't know for a few more years how permanent or temporary those changes are."