September Jobs Report: 29,000 Added, Wage Growth Slows to 3.0%

The U.S. economy added just 29,000 jobs in September, sharply below the pace most analysts had expected, according to analysis from the Center for Economic and Policy Research (CEPR).

That figure came with downward revisions totaling 60,000 to July and August, leaving the three-month average at 51,000. Wage growth cooled further to 3.0 percent year-over-year, while the three-month annualized rate of 2.6 percent now runs below inflation. Hourly pay, in other words, is no longer keeping pace with prices after two years of steady real gains.

What changed inside the report?

Health care and social assistance again carried the bulk of the hiring, contributing 23,000 of the month's 29,000 positions. CEPR noted that this sector alone accounted for 520,400 jobs over the past year, more than 100 percent of net employment growth given losses elsewhere.

Restaurants added 10,800 jobs, though CEPR flagged possible seasonal-adjustment issues — the four-month gain since May totals just 8,000. Local governments shed 13,000 jobs after a 54,000 gain in August, a swing CEPR attributed to seasonal-adjustment noise. Construction added 11,000, above its 9,000 trailing-12-month average but well below the 16,000 monthly pace of 2023-2024. Manufacturing posted its fourth straight month of modest growth at 9,000 jobs, leaving factory employment up only 40,000 over the year. Mining, including oil, lost 2,000.

How broad is the weakness?

The headline unemployment rate ticked up to 4.2 percent even as the labor force participation rate rose. The employment-to-population ratio for prime-age workers (25-54) climbed to 82.7 percent year-over-year, flat on the year but with a 0.1-point decline for prime-age men (86.2 percent) and a 0.2-point gain for prime-age women (75.3 percent).

The improvement masks strain elsewhere:

• Black workers' unemployment rose from 6.0 percent to 7.0 percent, with Black women up 1.2 points to 6.8 percent
• Jobless rate for workers aged 20-24 climbed from 7.1 percent to 8.0 percent
• The share of unemployed workers who quit voluntarily fell to 10.5 percent, the lowest since May 2024 — a level CEPR analysts called "consistent with the story of falling wage growth, since workers who change jobs typically get larger pay raises" than those who stay

Who is losing ground?

Native-born workers are not visibly benefiting from tighter immigration enforcement, the analysis found. Their employment-to-population ratio sits at 58.3 percent, down 0.7 percentage points from a year ago and a full point since September 2024. Foreign-born workers, by contrast, are 63.9 percent employed, up 0.4 points year-over-year.

Self-employment has cooled alongside wage employment. Unincorporated self-employment is down 1.6 percent over the year; the incorporated category fell 2.4 percent. Both series had run well above pre-pandemic levels in 2024, but CEPR wrote that "this trend seems to have stopped in the last two years."

Is AI driving any of this?

Evidence so far is limited, according to CEPR's read of the data. Insurance shed another 2,300 jobs in September, bringing the 12-month loss to 72,700 (2.4 percent of sector employment). Publishing lost 4,000 in the month and 32,600 over the year (3.6 percent), a mix CEPR attributed to "consolidation and AI." Motion pictures are down 20,300 jobs in the past year (5.8 percent of the sector).

On the productivity side, the index of aggregate hours grew at a 1.2 percent annualized rate. CEPR analysts estimated that even at a 3.0 percent GDP growth pace, that would translate to only roughly 1.8 percent productivity growth — "slightly above the recent trend, but hardly some sort of unprecedented boom." As the analysis put it: "to date we are not seeing any evidence of AI being a totally transformative technology."

What does it mean for workers?

For job seekers, the numbers describe a market that has stopped tightening but has not yet rolled over. Quit rates are at their weakest since mid-2024, real wage growth has stalled, and the sectors still hiring — health care, food service, construction — are concentrated rather than broad-based. Black workers and young workers are seeing unemployment climb at the same time prime-age employment ratios improve, suggesting the slowdown is unevenly distributed across the labor force.

Whether October confirms a genuine stall or a September outlier will hinge largely on whether the health-care hiring pattern and the wage series hold.