Key Notes
- September payrolls increased by 29,000, missing hiring forecasts as unemployment edged up to 4.2%.
- Downward revisions removed 60,000 jobs from July and August, weakening the recent employment trend.
- Hourly earnings rose just 0.1% monthly and 3.0% annually, adding a softer wage signal before the Fed’s October meeting.
The U.S. economy added just 29,000 jobs in September, missing expectations as unemployment edged up to 4.2% and wage growth slowed. The combination gives the Federal Reserve a weaker labor-market reading less than three weeks after it raised interest rates.
The Bureau of Labor Statistics reported the figures on October 2. It also revised July and August payroll growth down by a combined 60,000, reducing the strength of the hiring trend leading into September.
The payroll gain fell short of the 89,000 forecast listed by Investing.com. A separate Dow Jones survey cited by CNBC expected 84,000 jobs and 4.1% unemployment, underscoring that the result was weaker than either survey anticipated.
September Jobs Report Misses Hiring and Wage Forecasts
| Indicator | September actual | Forecast | August |
|---|---|---|---|
| Nonfarm payroll change | +29,000 | +89,000 | +133,000, revised |
| Unemployment rate | 4.2% | 4.1% | 4.1% |
| Hourly earnings, monthly | +0.1% | +0.3% | +0.3% |
| Hourly earnings, annual | +3.0% | +3.2% | +3.1% |
The payroll and wage expectations above come from Investing.com’s payroll calendar, monthly earnings and annual earnings entries. Unemployment expectations match the Dow Jones survey. August payrolls reflect the updated BLS estimate, rather than the initially reported 162,000.
September’s payroll increase was also below the average monthly gain of 45,000 over the preceding 12 months. BLS described overall employment as little changed, with no major industry showing a substantial monthly shift.
Revisions Weaken the Recent Hiring Picture
August’s increase was cut by 29,000 to 133,000. July was revised down by 31,000, changing a previously reported gain of 21,000 into a loss of 10,000 jobs.
The revisions matter because September’s weak result follows a less robust summer than earlier releases suggested. The updated July–September figures average roughly 51,000 new jobs a month, calculated from the three BLS estimates.
Payroll estimates are revised as additional employer reports arrive and seasonal factors are recalculated. September’s number remains preliminary, so the current release establishes the latest available picture rather than a final count.
The weakness was not uniform across employers. Private payrolls increased by 46,000, while government employment fell by 17,000, according to the report’s establishment-survey table.
Health Care Adds Jobs as Financial Employment Contracts
Health care added 17,000 jobs, about half its average monthly increase of 33,000 over the preceding year. Gains in ambulatory services and hospitals were partly offset by losses in nursing and residential care facilities.
Construction added 11,000 jobs and manufacturing added 9,000. BLS characterized both monthly changes as small; manufacturing employment nevertheless remained 72,000 above its December 2025 low.
Financial activities lost 7,000 jobs. Employment in the sector was down by 129,000 from its May 2025 peak, with insurance carriers and related businesses accounting for most of that longer decline.
The unemployment rate’s rise was modest. At 4.2%, it remained within the 4.1%–4.3% range recorded since March. About 7.1 million people were unemployed, including 1.9 million who had been looking for work for at least 27 weeks.
Labor-force participation stood at 61.8%, compared with 61.6% in August. The household survey also showed employment increasing, illustrating why a small rise in unemployment does not by itself establish widespread job losses: the number of people working or seeking work can grow at the same time.
Slower Wage Growth Complicates the Fed’s Next Decision
Average hourly earnings for private-sector employees increased by five cents to $37.81. The 0.1% monthly gain was below the 0.3% forecast, while annual growth of 3.0% fell short of the expected 3.2%. The average workweek remained at 34.4 hours.
Slower pay growth can ease one source of business cost pressure, but nominal wages are not a measure of consumer inflation or a direct calculation of workers’ purchasing power. Changes in the mix of jobs can also affect the average.
In its September 16 policy statement, the Fed raised its target range by a quarter percentage point to 3.75%–4.00%, citing elevated inflation alongside resilient spending and investment. The new jobs report adds evidence of weaker hiring without resolving that inflation concern.
The release follows the bond selloff covered by MarketSpeaker on October 1 and the dollar’s recent advance against the euro. Those moves preceded Friday’s employment figures; the jobs data now provide a new test of expectations for American growth and interest rates.
The Fed’s next meeting is scheduled for October 27–28. September’s payroll miss and slower wages will be assessed alongside inflation and other activity data, rather than determining the decision alone. BLS will release October’s employment report on November 6.
