US Hiring Slows Sharply as Unemployment Rises in September

U.S. employers added just 29,000 jobs in September, far fewer than economists expected, while the unemployment rate rose to 4.2%, the Bureau of Labor Statistics reported Friday. The final monthly jobs report before the midterm elections also showed that hiring in July and August was weaker than first reported.

The Labor Department cut its estimates for those two months by a combined 60,000 jobs. July’s initially reported gain of 21,000 became a loss of 10,000, while August’s gain was reduced from 162,000 to 133,000. September’s figure marked a sharp slowdown even from that revised August total.

Forecasts varied, but all pointed to substantially more hiring: a Dow Jones survey cited by NBC News projected 84,000 jobs, a FactSet estimate cited by CBS News put the figure at 90,000, and The Guardian reported expectations of just under 70,000. Economists in the Dow Jones survey had also expected unemployment to remain at August’s 4.1%.

Average hourly earnings rose 0.1% from August and 3% from a year earlier. That annual increase was below the 3.4% inflation rate recorded in August. September inflation figures are due Oct. 14. NBC News described September as the sixth consecutive month in which wage growth trailed inflation; CBS News counted five consecutive months before September.

Health care accounted for much of September’s job growth, adding 17,000 positions, though the BLS said that was slower than the sector’s average monthly gain over the previous year. Construction added 11,000 jobs and manufacturing added 9,000. Employment showed little change in several other industries, including oil and gas, professional services, and leisure and hospitality.

Other measures presented a more mixed picture. The Guardian reported that jobless claims had fallen for a fourth straight week and that job openings and hiring were little changed in August. CBS News reported that layoffs through September were down 40% from the same period in 2025, according to outplacement firm Challenger, Gray & Christmas.

The weaker payroll number put fresh attention on the Federal Reserve, which raised interest rates last month for the first time in more than three years. At the time, Fed Chair Kevin Warsh said the labor market was “basically running consistent with full employment,” while warning that “inflation is too high and has been for too long,” The Guardian reported.

“For the Fed, these numbers do not make a case for a rate increase in October,” Ken Mahoney, chief executive of Mahoney Asset Management, told CBS News. “A hike would have to come from the inflation data, not from a labor market that produced 29,000 jobs against a 90,000 estimate and then subtracted 60,000 from the prior two months.”

Investors responded quickly: stock futures rose after the report and Treasury yields initially fell, NBC News reported. Borrowing costs remain a concern. The Guardian said mortgage rates rose from 7% to 7.28% on Thursday, while NBC News reported that the average 30-year fixed rate reached as high as 7.6% during the week.