September Jobs Report: Employers Add Just 29,000 Jobs and Unemployment Ticks Up to 4.2%
Hiring came in far below the 90,000 economists expected, and downward revisions took 60,000 jobs off July and August.
American employers hired at a much slower pace in September than forecasters expected.
The Bureau of Labor Statistics reported Friday that the economy added 29,000 jobs. Economists polled by LSEG expected 90,000. The unemployment rate rose to 4.2%, above the 4.1% forecast, according to Fox Business.
The revisions were not kind either. July was revised down to a loss of 10,000 jobs, from a gain of 21,000. August was revised down to 133,000 from 162,000. Together, the two months are 60,000 jobs lower than first reported.
Where the jobs were: private payrolls grew by 46,000, short of the 85,000 estimate. Manufacturing added 9,000 and construction added 11,000. Healthcare added 16,700, slower than its 33,000 monthly average over the past year. Government payrolls fell by 17,000, with most of the state and local losses in education. Financial activities lost 7,000 jobs and are down 129,000 from a May 2025 peak.
Wages cooled. Average hourly earnings rose 3% from a year earlier, under the 3.2% economists expected. The labor force participation rate was 61.8%. About 1.9 million people have been unemployed for 27 weeks or longer, 27.1% of all unemployed, and 4.5 million are working part time because they cannot find full-time work.
Analysts read it as a slow market and not a collapsing one. Vanguard's Adam Schickling called it a "low-hire, low-fire labor market." JPMorgan Wealth Management's Phil Camporeale said weaker jobs and wages show the labor market "is not a source of inflationary pressure."
The Fed angle: Fox reports the CME FedWatch tool put the odds of the Fed holding its rate at 3.75% to 4% at its late-October meeting at 79.5%, with a 66.2% chance of a quarter-point hike in December. Stocks rose, with the S&P 500 up 0.96% mid-morning.
One caution. Less than two weeks later, the September inflation report ran hotter than expected, so the picture for the Fed and for household budgets has shifted since this report came out. Read the two together.