U.S. job growth stalls as employers add just 29,000 positions in September

The U.S. labor market all but stalled in September, with employers adding a scant 29,000 jobs and the unemployment rate ticking up to 4.2%, according to the Bureau of Labor Statistics' employment situation report released Friday morning. The reading is roughly a third of the pace employers had set over the prior 12 months, when monthly gains averaged 45,000, and it is the clearest sign yet that the hiring slowdown that has dogged the economy since spring is deepening rather than easing.

The disappointment was compounded by steep downward revisions to the two prior months. The BLS said the change in payrolls for July was revised down by 31,000, from an initial gain of 21,000 to an outright loss of 10,000, while August was cut by 29,000, from 162,000 to 133,000. Combined, employers hired 60,000 fewer workers over the summer than the government had originally reported, a pattern economists said points to a labor market losing momentum well before September's weak print confirmed it.

The pain was not evenly distributed. Health care remained the economy's most reliable engine, adding 17,000 jobs as ambulatory services and hospitals offset a continuing decline in nursing-facility staffing. Construction added 11,000 positions and manufacturing added 9,000, led by machinery and plastics producers. But financial activities shed 7,000 jobs in September and have now lost 129,000 positions since peaking in May 2025, with insurance carriers accounting for the bulk of the retreat.

Wage growth offered only modest reassurance. Average hourly earnings rose 0.1% in September to $37.81, up 3.0% over the past year. The labor-force participation rate held steady at 61.8%, and 7.1 million Americans were counted as unemployed.

Reuters reported that the combination of a weak headline number and large negative revisions is likely to intensify pressure on the Federal Reserve to keep cutting interest rates when policymakers meet later this month. Traders in futures markets added to bets on a fourth-quarter rate cut within minutes of the report's release.

MarketWatch's live coverage noted the jobless rate has now held in a narrow band between 4.1% and 4.3% since March, suggesting a labor market that is cooling gradually rather than cracking outright.