US Jobs Report: Just 29,000 Jobs Added, Unemployment 4.2%

The latest US jobs report September data showed the labor market cooling sharply, with employers adding just 29,000 jobs and the unemployment rate rising to 4.2 percent, the Bureau of Labor Statistics reported Friday.

The figure came in well below the roughly 90,000 jobs economists surveyed by Reuters had expected. It was also the final official employment snapshot before the midterm elections, giving the report added political and market weight.

What the US Jobs Report September Numbers Show

September’s gain marked a slowdown from August, when a downwardly revised 133,000 jobs were added. July was revised to a loss of 10,000 jobs, down from a previously reported gain of 21,000. Combined, the revisions erased about 60,000 previously reported job gains.

• Nonfarm payrolls: +29,000 in September
• Unemployment rate: 4.2%, up from 4.1% in August
• Average hourly earnings: $37.81, up 3% year over year
• Labor force participation: 61.8%, up from 61.6%

Through September, the economy has added an average of 68,000 jobs per month this year, according to BLS data. Wage growth slowed for the fourth straight month to 3 percent annually, the lowest since May 2021.

Markets Read Weakness as Relief

Stock futures rose after the release and bond yields fell, as investors reassessed the need for another Federal Reserve rate increase. The 10-year Treasury yield slipped to about 5.16 to 5.17 percent after hitting a 24-year high earlier in the week, according to market reporting from Barron’s and CoinDesk.

Traders sharply reduced bets on an October hike. Jeff Schulze, head investment strategist at Franklin Templeton Institute, wrote that the soft payroll report demonstrates a labor market that is simmering rather than boiling, bolstering the case for the Fed to remain on hold.

Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, said in a note that even after the disappointment, the three-month pace of job growth remains near estimates of the rate needed to hold unemployment steady, but slowing wage growth alongside accelerating inflation signals workers are struggling to move into better-paying jobs.

Which Sectors Added and Lost Jobs

Health care added 17,000 jobs, roughly half its average monthly gain over the prior year. Construction increased by 11,000 and manufacturing added 9,000 positions.

Several white-collar sectors shed workers. Information employment declined by 10,000, financial activities lost 7,000 jobs and professional and business services fell by 9,000, according to BLS figures summarized by the Daily Caller and USA Today.

What It Means for the Fed

Fed officials will review the jobs data alongside the September inflation report due October 14 ahead of their October 27-28 meeting. Policymakers raised rates in September for the first time in three years, citing inflation concerns.

Olu Sonola, head of US economics at Fitch Ratings, called the report disappointing and said weak job growth, a slightly higher unemployment rate, contained wage gains and downward revisions give the Fed little reason to keep an October hike on the table, while adding that consumer prices remain the report that matters most.

Economists also noted that payrolls can underperform when Labor Day falls late in September, as it did this year, and that layoffs remain historically low. First-time applications for unemployment benefits have hovered near multi-decade lows.

For workers and employers, the picture remains what economists describe as low-hire, low-fire: companies are holding onto staff but adding slowly amid an aging population, increased retirements, a decline in immigration and rapid adoption of artificial intelligence.

The next test comes in two weeks, when inflation data will show whether paychecks kept pace with prices in September after falling behind in July and August.

The report adds to a complicated picture for households. Inflation has accelerated even as wage growth slows to 3 percent, leaving paychecks further behind prices for a third straight month. Economists say the combination, sometimes called a low-hire, low-fire market, can feel worse than the headline unemployment rate suggests because workers who lose a job or want to switch face long searches, while those employed see limited raises and fewer outside offers to negotiate against.

Consumer expectations have grown more anxious despite low layoffs. A recent survey cited by the Daily Caller found Americans’ expectations that unemployment will rise over the next year at their highest since April 2020. With the September inflation report due October 14, the Fed’s October 27-28 meeting will weigh both mandates — price stability and maximum employment — against data pointing in opposite directions.