Finance02 October, 20262 min read
U.S. Adds 29,000 Jobs in September as Unemployment Rises to 4.2%
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U.S. added 29,000 jobs in September, well below expectations. Unemployment rate rose to 4.2% in September.
33 outlets told this the same way.
Jobs slow, unemployment rises
The U.S. added 29,000 jobs in September and the unemployment rate rose to 4.2% from 4.1% in August, according to the Labor Department. The Labor Department said hiring dropped from a revised 133,000 in August, and it also shaved 60,000 jobs off combined July and August payrolls. Luke Tilley, chief economist at Wilmington Trust, said, "In this data, there is no sign that the labor market is stoking inflation," as the report landed a month before voters go to the polls in pivotal midterm elections.
The report also showed average hourly wages were up 3% from a year earlier, the smallest year-over-year gain since May 2021, while Federal, state and local governments cut 17,000 jobs last month. The unemployment rate ticked up partly because 485,000 people entered the workforce and not all of them found jobs right away, leaving the labor market described as resilient but unsettled.
Fed focus shifts
Futures moved higher after the data, and the report said Treasury yields moved lower as traders recalibrated expectations for Federal Reserve policy.
Thomas Simons, chief U.S. economist at Jefferies, said, "For the Fed, this number should be the nail in the coffin for an October hike," after the September payrolls came in at 29,000.
Bloomberg said the unemployment rate rose slightly to 4.2% and that the report signaled caution among employers when hiring in a context of rising costs.
The report also said traders cut back their bets on a rate hike by the Fed in October, with futures markets pricing in just a 23% chance of a 25-basis-point hike in the 48 hours before the data.
The Labor Department employment report became the last official snapshot before the Nov. 3 elections, with the economy expected to play a key role in how Americans vote.
Wages, sectors, and sentiment
The September report showed healthcare added 17,000 jobs, construction added 11,000, and manufacturing added 9,000, while financial activities shed 7,000 jobs. The report said average hourly earnings rose 0.1% from the prior month and climbed 3% from a year earlier, shy of the 3.2% anticipated. Glassdoor chief economist Daniel Zhao said, "Employee confidence has been continuously grinding downward over the last year as workers grow increasingly anxious about everything from layoffs to AI," as the jobs report landed.
The Associated Press-NORC Center for Public Affairs Research found that only 17% of U.S. adults approve of Trump’s handling of the cost of living, and just 26% approve of his handling of the economy overall. The report also said the Labor Department measure of gross hiring has been stuck in a rut for more than two years, describing a "low-hire, low-fire" job market where jobseekers struggle to find work.