US September Job Growth Plummets to 29,000

The United States Department of Labor reported that the US economy added only 29,000 nonfarm payroll jobs in September, significantly missing economist forecasts of 70,000 to 90,000. The unemployment rate rose to 4.2% from 4.1% in August, driven partly by 485,000 people entering the workforce. The Bureau of Labor Statistics also revised July and August figures downward by a combined 60,000 jobs, revealing that the labor market actually contracted by 10,000 jobs in July.

Sector-specific data showed modest gains in healthcare, construction, and manufacturing, while government positions fell by 17,000. Average hourly wages grew by only 0.1% from the previous month, marking the sixth consecutive month that wages trailed inflation. Economists describe the current environment as a low-hire, low-fire market where job security is high for those employed, but new seekers struggle to find opportunities.

Financial markets reacted positively to the weak data, as investors believe the Federal Reserve is now more likely to hold interest rates steady at its October 27-28 meeting. Treasury yields tumbled while stocks and gold rose. This economic softening occurs one month before midterm elections, amid low public approval for President Donald Trump's handling of the cost of living and inflation, which reached a three-year high of 3.4% following the start of the US-Israel war with Iran.