US Employers Added Just 29,000 Jobs in September

US employers added 29,000 jobs in September, the Bureau of Labor Statistics reported Friday — barely a third of the 84,000 gain economists surveyed by Dow Jones had forecast — and the unemployment rate rose to 4.2% against an expected 4.1%.

The shortfall was the last monthly jobs release before the 3 November midterm elections, as The Guardian noted, and it landed with revisions that made the prior two months look weaker than first reported.

How big were the revisions?

August's gain was cut to 133,000 from an initial estimate of 162,000. July flipped from a modest gain to a loss of 10,000 jobs. Together, the revisions stripped 60,000 positions from earlier counts.

Thomas Simons, chief U.S. economist at Jefferies, said in a note that the August figure now looks like a rebound from very weak hiring in June and July. He had expected that momentum to carry into September, given low jobless claims in recent weeks. It didn't.

Where were jobs gained and lost?

The sector picture split sharply, and it matters for anyone weighing a move.

• Health care led all industries with 17,000 new jobs, according to The Guardian.
• Construction and manufacturing also posted gains, CNBC reported.
• Information, financial and professional services all lost jobs — a direct hit to white-collar hiring.

The pain was uneven across demographic lines. Unemployment among Black Americans rose a full percentage point to 7%, double the rate for white Americans. The overall jobless rate stood at 4.5% as recently as November of last year.

Why did unemployment rise?

The rise to 4.2% largely reflected more people entering the labor force, not mass layoffs, CNBC reported. Household employment grew by 406,000, while the labor force grew by 485,000 — the larger inflow of jobseekers pushed the rate up. The participation rate climbed 0.2 percentage point to 61.8%, its highest level since May.

For an individual job seeker, that combination means more competition per opening: more people looking, slower hiring, and fewer professional-services roles to chase.

What happened to wages?

Average hourly earnings rose just 0.1% in September, short of the 0.3% forecast. Year over year, pay was up 3% — the slowest pace since May 2021.

That 3% figure resets the benchmark for salary negotiations. If you are switching jobs or asking for a raise, offers anchored to the 4%-plus wage growth of recent years are increasingly out of step with what the data now shows.

What does this mean for the Fed and borrowing costs?

The Federal Reserve raised interest rates last month for the first time in three years. Fed Chair Kevin Warsh said then that the labor market was running consistent with full employment but that inflation had been too high for too long.

September's numbers change that calculus. Traders now put the odds of the Fed holding rates steady at its 27–28 October meeting at 82.8%, according to CME Group's FedWatch tool. Simons called the report "the nail in the coffin" for an October hike. The Guardian reported that most Fed officials had penciled in at least one more increase this year, which now looks more likely in December.

Markets responded quickly. Nasdaq futures gained 1.2%, and the 10-year Treasury yield fell 7 basis points to 5.17%, after touching 5.34% earlier this week — a multi-decade high.

For households, borrowing costs remain the pressure point. The average mortgage rate jumped from 7% to 7.28% on Thursday, the highest in three years and the largest weekly rise since 2022, The Guardian reported.

With hiring this soft, wage growth decelerating and rate-hike odds collapsing, the December meeting now looks like the likeliest venue for the Fed's next move — and the October and November jobs reports will determine whether it happens at all.