September US Jobs Report Shows Weak Hiring, Rising Unemployment
U.S. Employers added just 29,000 jobs in September, far below expectations, as the unemployment rate rose to 4.2%.
The September jobs report revealed a sharp slowdown in hiring, with U.S. Employers adding just 29,000 positions. The unemployment rate ticked up to 4.2%, missing economist expectations for a gain of 90,000 jobs and a steady 4.1% jobless rate. Average hourly wages increased 3% year-over-year, the smallest annual gain since May 2021. A significant influx of 485,000 people entering the workforce contributed to the rise in unemployment.
Revisions highlight earlier strength, now under pressure
Initial job figures for July and August were revised down by a combined 60,000. After revisions, the labor market actually contracted by 10,000 jobs in July. August's gain was revised to 133,000. This indicates prior strength may not have been sustainable.
| Sector | September Job Change |
|---|---|
| Construction | +11,000 |
| Manufacturing | +9,000 |
Sectoral divergence: healthcare gains, financial losses
Job creation was highly uneven across industries. Healthcare led with 17,000 new positions, though this was half its monthly average over the past year. Meanwhile, the financial sector lost 7,000 jobs, bringing total losses to 129,000 since its recent peak in May 2025. Professional and business services trimmed 9,000 jobs, and government employers cut 17,000 positions.
Wage growth remains modest amid labor market softness
Average hourly earnings grew only 0.1% from August. The 3% annual increase is the lowest in over five years. This modest wage growth coincides with broader labor market softness.
Broader economic pressures persist
Multiple headwinds are mounting. The Federal Reserve raised interest rates in September for the first time in three years, pushing mortgage rates to 7.28%. The 10-year Treasury yield recently hit a 24-year high. Higher oil prices are costing households an estimated $936 this year. Inflation has remained above the Fed's 2% target for more than five years. Consumer confidence has dropped to its lowest level in over a decade, with 28% of respondents expecting fewer jobs in six months. An employee confidence index also fell to its third record low this year. The labor market is now characterized as low-hire, low-fire, with employers neither laying off nor hiring in significant numbers. The average duration of unemployment has stretched to over six months, the longest since February 2022. Unemployment among Black Americans rose to 7%, a one percentage point increase. Market reaction was mixed; futures for the S&P 500 and Nasdaq rose after the report, while the 10-year Treasury yield fell to 5.17%. The data strengthens the case for the Federal Reserve to hold its key interest rate steady at its next meeting, balancing weaker job market signals against persistent inflation concerns.
