US September Job Growth Plummets to 29,000

The United States Department of Labor reported that employers added only 29,000 jobs in September, significantly missing economist expectations of 84,000 to 90,000. The unemployment rate rose to 4.2% from 4.1% in August, a shift driven partly by 485,000 people entering the workforce. The Bureau of Labor Statistics also issued downward revisions for July and August totaling 60,000 jobs, revealing that the labor market actually contracted by 10,000 jobs in July.

Job growth was concentrated in healthcare, construction, and manufacturing, while government positions dropped by 17,000. Average hourly wages grew by only 0.1% monthly and 3% annually, the smallest year-over-year increase since May 2021. Economists describe the current environment as a "low-hire, low-fire" market, where job security remains high for those employed, but new seekers struggle to find opportunities. Consumer confidence has hit a decade low, and Glassdoor reported a record low in its employee confidence index.

Financial markets reacted positively to the soft data, as Treasury yields fell and stocks rose. Investors interpreted the weak growth as a signal that the Federal Reserve System may pause its rate-hiking cycle at its October 27-28 meeting. Market-implied odds of an October hike dropped from 69% to approximately 13% following the report. The slowdown occurs amid the US-Israel war with Iran, which has driven diesel and gasoline prices to record highs, and ahead of the November 3 midterm elections, where President Donald Trump faces low public approval for his handling of the cost of living.