According to a report from The Associated Press, U.S. employers added a disappointing 29,000 jobs and the unemployment rate ticked up last month, the government reported Friday, a month before voters go to the polls in pivotal midterm elections at a time of discontent over the high cost of living and the state of the economy.
Hiring dropped from a revised 133,000 in August, the Labor Department said. The unemployment rate rose to a still-low 4.2% from 4.1% in August.
Economists had expected September payrolls to come in around 90,000.
Labor Department revisions also shaved 60,000 jobs off combined July and August payrolls. Average hourly wages were up just 3% last year from a year earlier, the smallest year-over-year gain since May 2021.
The new hiring data could draw the Federal Reserve’s attention back to hiring and jobs, given that one of the central bank’s two mandates is to seek maximum employment. Many Fed officials have said in recent weeks that they are primarily focused on their other mission, which is combating inflation. With the job market looking a bit weaker, the Fed may be more inclined to keep its key rate unchanged when it meets next month, rather than raise it.
Still, the unemployment rate remains low and inflation has been above the central bank’s 2% target for more than five years, so the Fed’s concern about elevated prices is still front and center.
Federal, state and local governments cut 17,000 jobs last month. Professional and business services companies, which provide administrative and technical expertise, trimmed 9,000 jobs.
Healthcare companies created 17,000 jobs in September, but that was barely half the 33,000 they’ve added, on average, each month for the past year. Bradley Saunders, an economist at Capital Economics, wrote that the slowdown in healthcare hiring might reflect the Trump administration’s revocation of work authorizations for 350,000 Haitians.
Construction companies added 11,000 jobs and manufacturers 9,000.
Unemployment rose partly because 485,000 people entered the workforce and not all of them found jobs right away.
The U.S. job market has proven resilient in the face of a series of shocks — trade wars, persistent inflation, high interest rates and a conflict with Iran that has driven energy prices higher. Friday’s jobs report is the last one that will come out before the Nov. 3 elections that will determine whether President Donald Trump’s Republicans maintain full control of Congress.
Futures for the S&P 500 and Nasdaq composite added to their gains after the data was released, while Treasury yields moved lower. The yield on the 10-year Treasury was 5.17%, down from 5.24% a day earlier.
The U.S. job market has recovered from a dismal 2025, but ordinary Americans remain unhappy about the economy and the high cost of living.
