U.S. employers added only 29,000 jobs in September 2026, and the unemployment rate climbed to 4.2%, the Bureau of Labor Statistics reported on October 2. Economists surveyed by Bloomberg had looked for about 90,000.
Revisions made the picture worse. The BLS cut July by 31,000, which turned that month into a loss of 10,000 jobs, and trimmed August by 29,000 to 133,000. August had first been put at 162,000.
Where the jobs came from
Health care led with 17,000 new positions, while construction and manufacturing posted slight gains. Average hourly earnings rose 5 cents, or 0.1%, to $37.81. Over twelve months that is a 3% increase, which trails inflation. Before September, the Associated Press said, employers had averaged 80,000 new jobs a month this year. That compares with 9,700 a month in 2025 and 166,000 a month across 2023 and 2024.
The Labor Department had already signalled the cooling. Its September 29 release showed job openings sliding to 7.08 million in August, the lowest since March and below the 7.2 million forecasters expected. Layoffs fell and quits eased slightly, but gross hiring stayed low. Danny Friel, lead economist at Chime, said few separations and falling jobless claims show that most people are holding onto their jobs. The flip side, he added, is that with wages trailing inflation since April, workers have fewer chances to move to better-paid work.
Private data looked firmer. ADP counted 90,000 jobs added in September, though the BLS survey covers a broader set of employers. Deborah Saneman, CEO of workforce software firm Würk, said employers are still approaching hiring with caution amid economic uncertainty.
Energy costs and borrowing
Higher energy prices tied to the war with Iran have pushed up inflation. The Federal Reserve raised interest rates on September 16 for the first time in three years, and chair Kevin Warsh called the labor market consistent with full employment while saying inflation had been too high for too long. The 10-year Treasury yield hit a 24-year high. Mortgage rates jumped to 7.28% from 7% a week earlier, the biggest weekly rise since 2022, The Guardian reported. Dearer credit tends to slow business expansion and, with it, hiring.
Jobless claims edged lower for a fourth straight week, and unemployment remains under the 4.5% reached in November 2025. Consumer confidence, by the Conference Board’s measure, fell to its lowest in more than a decade.
The September report is the last monthly jobs release before the midterm elections on November 3.
