U.S. employers added only 29,000 jobs in September, a significant slowdown from the revised 133,000 jobs gained in August, the Labor Department reported on Friday. The unemployment rate rose slightly to 4.2 percent from 4.1 percent the previous month. The weaker-than-expected hiring figures come less than a month before crucial midterm elections, amid ongoing public concern over inflation and economic conditions.
Economists had forecast job growth of around 90,000 for September, highlighting the unexpectedly sluggish labor market. The rise in the unemployment rate partly reflects an influx of 485,000 people entering the workforce, many of whom were unable to find jobs immediately.
Wage growth also moderated, with average hourly earnings increasing by just 3 percent compared to a year earlier. This represented the smallest annual wage gain since May 2021, suggesting subdued upward pressure on wages. Luke Tilley, chief economist at Wilmington Trust, noted that the data showed no indication of the labor market fueling inflation.
Despite the slowdown, the unemployment rate remains near historically low levels. Inflation, however, has stayed above the Federal Reserve’s 2 percent target for more than five years, keeping price stability high on the central bank’s agenda. Recent comments from several Fed officials have emphasized a primary focus on controlling inflation, but the weaker job market may influence the Federal Reserve’s upcoming policy decisions, potentially favoring a pause at the next interest rate meeting.
Sector-by-sector, federal, state, and local governments trimmed 17,000 jobs in September, while professional and business services saw a decline of 9,000 positions. The health care sector added 17,000 jobs, a notable slowdown compared to its monthly average of 33,000 over the past year. Some analysts, such as Capital Economics economist Bradley Saunders, have linked the health care hiring slowdown in part to the previous administration’s revocation of work authorizations for approximately 350,000 Haitian workers.
Other sectors experienced modest gains, with construction employment rising by 11,000 jobs and manufacturing adding 9,000. The jobs report underscores the resilience of the U.S. labor market amid challenges including trade tensions, elevated inflation, higher interest rates, and international conflicts that have driven up energy costs.
As political campaigns intensify ahead of the November 3 midterm elections, concerns about the economy persist. A recent poll indicated that just 17 percent of U.S. adults approve of President Donald Trump’s handling of the cost of living, while 26 percent expressed approval of his overall economic management—both figures representing new lows. Consumer confidence also declined to the lowest point in more than a decade, with more than 28 percent of respondents expecting fewer jobs to be available in six months, twice the share anticipating job growth. These sentiments highlight the uncertain economic outlook facing many Americans in the election season.