Economy · 6 Oct 2026 · 2 min read
US added just 29,000 jobs in September as hiring stalls
Job growth fell far short of forecasts and earlier months were revised lower, cutting the odds of another Federal Reserve rate hike in October.
The short answer
The US economy added only 29,000 jobs in September 2026, well below the roughly 80,000 economists expected, and the unemployment rate held at 4.2%, according to the Bureau of Labor Statistics. July and August were revised down by a combined 60,000 jobs. Wages rose 3.0% from a year earlier. The weak report made another Fed rate hike in October less likely.
What’s going on here?
The Bureau of Labor Statistics reported on October 2 that nonfarm payrolls rose by just 29,000 in September, compared with forecasts of about 80,000 and an average monthly gain of 45,000 over the previous year. The unemployment rate was steady at 4.2%, within the 4.1% to 4.3% range it has held since March. Revisions made the picture weaker: July now shows a loss of 10,000 jobs instead of a gain of 21,000, and August's gain was cut to 133,000 from 162,000.
What does this mean?
Hiring has slowed across the board. No major industry changed much in September. Health care, which has carried job growth for years, added 17,000 jobs, about half its recent monthly pace. Construction added 11,000 and manufacturing 9,000, while financial services lost 7,000 and are now down about 129,000 jobs since May 2025, mostly at insurance companies. The share of adults working or looking for work stayed at 61.8%.
Pay is rising, but slowly. Average hourly earnings for private-sector workers increased 0.1% in the month to $37.81 and are up 3.0% from a year earlier. Hours did not help either: the average private-sector workweek stayed at 34.4 hours. With prices pushed up by expensive energy, many households' real incomes are not keeping pace, which helps explain why consumers are drawing down savings to keep spending.
The report changes the picture for interest rates. The Federal Reserve raised rates in September and had signalled at least one more increase this year. After the jobs data, futures markets cut the probability of an October hike to around 24% from more than 75% a week earlier, and New York Fed President John Williams said there was no urgency to act. The next jobs report is due on November 6.
The household survey adds nuance. About 7.1 million people were unemployed, and roughly 1.9 million of them had been looking for work for six months or longer, a group that made up 27% of all jobless workers. Another 4.5 million people worked part time because they could not find full-time jobs. None of these numbers changed much in September, which suggests a labor market that is cooling gradually rather than breaking down. Large downward revisions, however, are often an early sign that momentum is weaker than first reports show.
The bull case
A cooling job market could let the Fed stop raising rates, which would ease pressure on borrowers and support stocks and bonds. Unemployment remains low by historical standards, so slower hiring could mean a soft landing rather than a downturn.
The bear case
Weak hiring, downward revisions and real incomes lagging inflation are classic signs of an economy losing momentum. If companies move from hiring less to cutting jobs, consumer spending could weaken quickly, while high energy prices limit how far the Fed can ease.
Why should I care?
For markets:
Bond yields and rate-sensitive stocks now hinge on whether upcoming inflation data lets the Fed pause, while very weak jobs numbers could raise recession worries.
The bigger picture:
For workers, a slower job market usually means fewer openings and smaller raises, which makes an emergency fund and manageable debts more important.
Market impact
| Asset (ticker) | Potential direction | Timeframe | Confidence | Reason |
|---|---|---|---|---|
| 10-year Treasury yield | ↓ bearish | Short term | Medium | Lower odds of another Fed hike tend to pull yields down. |
| S&P 500 (SPY) | ↔ neutral | Short term | Low | Fewer hikes help valuations, but slower growth weighs on profits. |
| US dollar (DXY index) | ↓ bearish | Short term | Low | A less aggressive Fed usually weakens the dollar. |
Potential impact, not investment advice.
Frequently asked questions
How many jobs did the US add in September 2026?
Nonfarm payrolls rose by 29,000 in September 2026, according to the Bureau of Labor Statistics, well below forecasts of about 80,000. The unemployment rate was 4.2%.
Will the Fed raise rates in October 2026?
After the weak jobs report, futures markets put the chance of an October hike at around 24%, down from more than 75% a week earlier. The decision will also depend on inflation data.
How fast are US wages growing?
Average hourly earnings for private-sector workers were $37.81 in September 2026, up 3.0% from a year earlier, according to the Bureau of Labor Statistics.
Sources: U.S. Bureau of Labor Statistics — Employment Situation, September 2026, Cointelegraph, CNBC
