Finance · updated 2h ago · 2 min read
U.S. Adds 29,000 Jobs in September as Unemployment Rate Rises to 4.2%
Nonfarm payrolls increased by 29,000 in September. Unemployment rate rose to 4.2% in September.
Whether the labour market is cooling or holding up.
10 of 12 outlets skipped it: rising unemployment partly because 485,000 entered the workforce.
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The Guardian
“a sign of a cooling labor market in the final jobs report before the midterm election.”Read the original ↗
It shapes whether readers expect continued stability or a weakening economy.
Jobs add 29,000
The U.S. economy added 29,000 jobs in September, and the unemployment rate rose to 4.2% from 4.1% in August, according to the government’s employment report. The Labor Department revised August’s gain down to 133,000, and it revised July from a 21,000 jobs gain to a jobs loss of 10,000. The report showed average hourly earnings rising 0.1% last month and 3% on a year-over-year basis, while economists had expected 0.3% monthly wage growth.
The Federal Reserve’s next decision became a focus after the data, with the 10-year Treasury yield slumping by 7 basis points to 5.17% and the 2-year yield falling to 4.71%. The report also showed the unemployment rate rising partly because 485,000 people entered the workforce and not all of them found jobs right away.
Markets recalibrate Fed
Traders interpreted the weaker payroll number as a reason to expect the Federal Reserve to hold its key rate unchanged, and U.S. stock index futures added to gains after the release.
CME Group’s FedWatch tool showed market-implied odds that the Fed would hold rates steady at its Oct. 27-28 meeting jumped to 82.8% after the data.
Thomas Simons, chief U.S. economist at Jefferies, said in a note that the payroll data should be "the nail in the coffin for an October hike."
Olu Sonola, head of U.S. economics at Fitch Ratings, said the report showed "a labor market with little hiring and little firing never disappeared," and he argued the CPI remains the report that matters most.
The data also left the Fed’s inflation focus intact, with the report noting inflation remained above the central bank’s 2% target for more than five years.
Hiring, wages, and politics
Healthcare added 17,000 jobs in September, while construction added 11,000 and manufacturing added 9,000, as financial activities shed 7,000 jobs.
The report tied the wage picture to inflation, with average hourly earnings rising 0.1% last month and 3% from a year earlier, described as the smallest year-over-year gain since May 2021.
The unemployment rate rose partly because 485,000 people entered the workforce, and the labor force participation rate edged up to 61.8%.
The jobs report arrived as the final official employment snapshot before the Nov. 3 elections, with the data framed as potentially influencing whether the Federal Reserve raises rates again.
Sarah House, senior economist at Wells Fargo, said, "it's really hard if you are one of those workers who loses your job or you're new to the labor force or you're coming back, there's not a lot of turnover."