US Job Growth Slows to 29,000 in September as Unemployment Rises
The US economy added 29,000 jobs in September, far below economists’ expectations, while unemployment edged up to 4.2%. Earlier employment figures were also revised lower, adding to signs of a softer labour market as the Federal Reserve weighs its next move on interest rates.
Job creation in the United States slowed sharply in September, with employers adding 29,000 positions and the unemployment rate edging up to 4.2%, according to government labour figures released on Friday.
The September increase was well below the 84,000 jobs economists surveyed by Dow Jones Newswires and The Wall Street Journal had expected.
Previous employment estimates were also adjusted downward. The Bureau of Labor Statistics cut the combined July and August figures by 60,000 jobs. After the revision, July was shown to have recorded a decline in employment rather than the previously reported increase of 21,000.
Health care provided one of the stronger contributions in September, adding 17,000 jobs. Even so, that was about half the sector's average monthly increase of 33,000 over the previous year.
Financial services moved in the opposite direction, shedding 7,000 positions during the month. Employment in the sector has fallen by 129,000 from its May 2025 peak, with insurance companies accounting for most of those losses.
Pay growth also remained under pressure from inflation. Average hourly earnings were 3.0% higher, but the report said wage increases were still not keeping pace with elevated prices.
The weaker jobs figures could become another factor in the Federal Reserve's interest-rate discussions. The US central bank increased rates in September as it continued its effort to contain inflation, while also monitoring employment as part of its mandate.
Two Federal Reserve policymakers had indicated during the week that another increase might not be needed at the October meeting. Financial markets, however, were still anticipating an additional rate rise before the end of 2026.
Nationwide chief economist Kathy Bostjancic said the employment report could support policymakers who favour waiting before raising rates again. Nancy Vanden Houten of Oxford Economics took a different view, saying inflation remained the larger concern and forecasting another increase later in October.
The labour report was released ahead of the United States' November midterm elections, where economic conditions are among the issues drawing political attention.