US economy adds just 29,000 jobs in September as hiring slows sharply

US employers added only 29,000 jobs in September, far below the roughly 70,000 economists had forecast, and the unemployment rate ticked up to 4.2%, marking a noticeable slowdown in the labor market ahead of the midterm elections. The modest gain was driven almost entirely by the healthcare sector, which contributed 17,000 of the new positions, while the information, financial and professional services industries posted losses. Revised data also trimmed earlier reports, cutting July’s job count by 10,000 and reducing August’s gain to 133,000 after an initial estimate of 193,000, underscoring a broader trend of weaker-than-expected employment growth.

The slowdown has significant implications for monetary policy, as the September report dampens expectations that the Federal Reserve will raise rates again before its November meeting. The Fed’s most recent hike—the first in three years—was justified by persistent inflation, especially in energy, even as the labor market has remained relatively robust this year. With average hourly earnings growth falling to 3%, the lowest pace in over five years, and job openings and hires holding steady, policymakers now see a “slow‑hire, slow‑fire” environment that may delay further tightening until the December conference, when most officials anticipate at least one more increase. Meanwhile, the data reveal stark racial disparities: Black unemployment rose to 7%, double the rate for white workers, highlighting uneven benefits from the still‑solid overall job market.

Broader economic pressures continue to weigh on households despite the still‑strong employment picture. Mortgage rates surged to 7.28%, the biggest weekly jump since 2022, while the 10‑year Treasury yield hit a 24‑year high, reflecting a global bond sell‑off. Higher oil prices are estimated to cost the average American household about $936, adding to inflationary strains that the Fed has flagged as “too high and has been for too long.” Private‑sector data from payroll firm ADP painted a more optimistic view, showing a 90,000‑job gain in September driven by healthcare, education and hospitality, but the contrast with the government report underscores the uncertainty facing both workers and policymakers as the election cycle approaches.

⚡ Effects Interpreter