U.S. job growth slowed sharply in September, with employers adding 29,000 nonfarm payroll jobs while the unemployment rate held at 4.2%, according to the Bureau of Labor Statistics.
The report, released October 2, showed a labor market that is not collapsing but is generating jobs at a much slower pace than earlier in the expansion. The number of unemployed people was little changed at 7.1 million, and the unemployment rate has remained between 4.1% and 4.3% since March.
Hiring was weaker than the recent trend
Total nonfarm payroll employment increased by 29,000 in September. BLS said payrolls had grown by an average of 45,000 per month over the previous 12 months.
Reuters reported that the September gain came in below economists’ expectations, adding to evidence that the labor market has cooled even as the unemployment rate remains relatively low by historical standards.
The report also revised earlier estimates downward. July payrolls were revised from a gain of 21,000 to a loss of 10,000, while August was revised from 162,000 to 133,000. Taken together, July and August employment was 60,000 lower than previously reported.
Health care continued to add jobs
Health care employment continued to trend upward, adding 17,000 jobs in September, although the pace was slower than the industry’s 12-month average. Construction added 11,000 jobs and manufacturing was little changed with a gain of 9,000.
Financial activities employment was also little changed for the month, declining by 7,000. BLS said employment in that sector is down by 129,000 from a recent peak in May 2025, with much of the decline concentrated in insurance carriers and related activities.
Wage growth continued, but at a slower pace
Average hourly earnings for private-sector workers rose by 5 cents in September to $37.81, an increase of 0.1% for the month. Over the previous 12 months, average hourly earnings were up 3.0%.
The average workweek for private-sector employees remained at 34.4 hours.
Wage growth matters because it helps show whether workers’ pay is keeping pace with changes in consumer prices. But one month’s earnings data should not be treated as a complete measure of household purchasing power. Inflation, hours worked, taxes, debt costs, and household composition all affect how families experience the economy.
Labor-force participation remained steady
The labor-force participation rate was 61.8% in September, while the employment-population ratio was 59.2%. Both measures changed little during the month and have shown little net movement since January, according to BLS.
About 4.5 million people were working part time for economic reasons, meaning they would have preferred full-time work but had experienced reduced hours or could not find full-time jobs. That measure also changed little in September.
Why the report matters politically
The jobs report arrives during the final month of the 2026 midterm campaign, when candidates from both parties are competing to define the condition of the economy for voters.
A weaker hiring number gives critics of the administration an argument that economic momentum is slowing. At the same time, an unemployment rate of 4.2% gives the administration room to argue that the labor market remains stable rather than entering a severe downturn.
Those are political interpretations. The underlying BLS data show a more mixed picture: low unemployment, slow payroll growth, modest wage gains, and significant downward revisions to prior months.
What comes next
The next Employment Situation report, covering October 2026, is scheduled for November 6. Before then, investors and policymakers will also receive additional inflation and labor-market data that could influence expectations for Federal Reserve policy.
For voters, the September report is likely to reinforce an economic debate that is already central to the midterms: whether a still-low unemployment rate outweighs concerns about slower hiring and household costs.
Sources reviewed: U.S. Bureau of Labor Statistics, Employment Situation — September 2026; Reuters, October 2, 2026.
