US adds 29,000 jobs in September, far below expectations

The U.S. economy added just 29,000 jobs in September 2026, far below the expected 90,000, while the unemployment rate rose to 4.2%. Downward revisions to July and August further signal a cooling, 'low-hire, low-fire' labor market. Annual wage growth slowed to 3%, falling behind the 3.4% inflation rate fueled by high energy costs from the war with Iran. This final jobs report before the November 3 midterm elections complicates the Federal Reserve's rate path and challenges the Trump administration amid low economic approval ratings.

September 2026 employment figures

• ▪The United States economy added 29,000 nonfarm payroll jobs in September 2026, falling far below the consensus economist expectation of 90,000 jobs
• ▪The United States labor force participation rate rose to 61.8% in September 2026 from 61.6% in August 2026, as 485,000 additional workers entered the labor force
• ▪The Bureau of Labor Statistics revised August 2026 job growth down to 133,000 from 162,000, and July 2026 job growth down to a loss of 10,000 from a gain of 21,000, representing a combined downward revision of 60,000 jobs
• ▪The national unemployment rate in the United States rose to 4.2% in September 2026 from 4.1% in August 2026

Job growth by sector

• ▪The U.S. construction sector added 11,000 jobs and the manufacturing sector added 9,000 jobs in September 2026, while the financial services sector lost 7,000 jobs
• ▪The healthcare sector led U.S. job growth in September 2026 by adding 17,000 positions, which was well below its average monthly gain of 33,000 over the prior year

Wage growth and purchasing power

• ▪Average hourly earnings for private nonfarm employees in the United States rose by 5 cents to $37.81 in September 2026, representing a 0.1% monthly increase
• ▪On a year-over-year basis, average hourly earnings in the United States rose 3% in September 2026, down from a 3.1% annual gain in August 2026 and marking the smallest annual increase since May 2021
• ▪The 3% annual wage growth in September 2026 was outpaced by the annual inflation rate of 3.4% recorded in August 2026, meaning real buying power for American workers continued to erode

Labor market outlook and confidence

• ▪Economists describe the U.S. labor market as being in a 'low-hire, low-fire' state, where existing workers enjoy job security and low layoff rates, but jobseekers face prolonged difficulty finding new employment
• ▪A Challenger, Gray & Christmas report showed U.S. employers announced 90,787 hiring plans in September 2026, up from August but down 23% compared to September 2025, marking the lowest September total of hiring plans since 2011
• ▪The Glassdoor Employee Confidence Index dropped in September 2026 to its lowest level since records began in 2016, driven by worker anxiety over layoffs and artificial intelligence

Federal Reserve interest rate policy

• ▪The Federal Reserve raised its benchmark short-term interest rate by 25 basis points in September 2026 to a range of 3.75% to 4.00%, marking its first rate hike in three years
• ▪Economists and strategists suggest that upcoming Consumer Price Index and Producer Price Index reports, alongside energy prices and geopolitical developments, will have more influence on the Federal Reserve's October 2026 rate decision than the September 2026 jobs report
• ▪Following the weak September 2026 jobs report showing 29,000 jobs added, financial markets priced in an 82% probability that the Federal Reserve will keep interest rates unchanged at its October 2026 meeting, up from 76% the day before

Political context and economic approval

• ▪An Associated Press-NORC poll released on October 1, 2026, showed that only 17% of U.S. adults approved of President Donald Trump's handling of the cost of living, and only 26% approved of his overall economic management
• ▪The September 2026 jobs report is the final major employment update before the U.S. midterm elections scheduled for November 3, 2026, which will determine control of Congress

Debatable claims

• ▪The 'low-hire, low-fire' job market does more harm than good for American workers
• ▪The Federal Reserve should pause interest rate hikes at its October meeting
• ▪The war with Iran is the primary driver of elevated US inflation
• ▪The weak September jobs report is a fair reflection of President Trump's economic stewardship