US job growth slowed significantly in September, with employers adding 29,000 jobs and the unemployment rate rising to 4.2%.
Key facts
- •Economists surveyed by FactSet had forecast the addition of 90,000 jobs, while other estimates anticipated just under 70,000.
- •The Labor Department revised July and August payroll gains downward by a combined 60,000 jobs.
- •Unemployment among Black Americans rose to 7%, an increase of one percentage point.
- •Average hourly earnings growth slowed to 3%, the lowest rate recorded since May 2021.
- •Financial services firms lost 7,000 jobs in September, contributing to the overall muted growth.
U.S. employers added 29,000 jobs in September, a figure that fell well short of economic forecasts and signaled a cooling labor market. The unemployment rate rose slightly to 4.2% from 4.1% the previous month. The Labor Department also revised down payroll gains for July and August by a combined 60,000, further tempering recent employment trends.
By the numbers
Industry Performance and Wage Growth
Hiring remained muted across most sectors, with healthcare emerging as a primary contributor by adding 17,000 jobs. Conversely, the financial services industry shed 7,000 positions, and losses were also reported in the information and professional industries. Experts noted that even in sectors like healthcare and construction, hiring activity was considered weak. Wage growth also showed signs of stagnation, rising at an annual rate of 3%. This represents the lowest rate of wage growth since May 2021 and remains below the August Consumer Price Index reading of 3.4%. Economists noted that inflation has effectively offset wage gains since March, contributing to a financial squeeze for many households.
Economic Context and Divergent Data
The September jobs report follows the Federal Reserve's recent decision to raise interest rates for the first time in three years, a move intended to address rising inflation and energy prices. While some analysts suggest the labor market is gradually cooling, others express concern regarding the durability of employment growth following the interest rate hike. Data from different sources provided varying perspectives on the labor market's health. While the Bureau of Labor Statistics reported the 29,000-job gain, private payroll firm ADP had previously reported that private sector employers added 90,000 jobs in the same period. Additionally, demographic disparities persist, with unemployment among Black Americans rising one percentage point to 7%, which is double the rate reported for white Americans.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by CBS MoneyWatch, Guardian Business.
