US Jobs Growth Slows as Unemployment Rises

US employment growth weakened sharply in September, with the economy adding just 29,000 jobs as the unemployment rate edged higher in the final jobs report before the midterm elections.

The US Labor Department said the economy added 29,000 jobs during September, well below economists' expectations. A Dow Jones survey had forecast 84,000 new jobs, while economists surveyed by Reuters had expected about 90,000.

The unemployment rate increased by 0.1 percentage point to 4.2 percent.

Healthcare accounted for the largest share of September's job gains, adding 17,000 positions. However, that represented a significant slowdown from the sector's average monthly increase of 33,000 jobs over the previous year.

Construction employment rose by 11,000, while manufacturing added 9,000 jobs.

Financial activities, including commercial banking and insurance, recorded a loss of 7,000 positions. Employment across several other major industries, including retail, oil and gas extraction, and leisure and hospitality, was largely unchanged.

The latest figures also showed that earlier employment gains were weaker than initially reported.

July's figures were revised from an initial increase of 21,000 jobs to a loss of 10,000. August's employment gain was revised downward by 29,000, from 162,000 to 133,000.

Wage growth also weakened. Average wages increased by 3 percent over the year, representing the slowest annual rate of growth in five years.

The report comes after a series of economic indicators pointed to a slowing US labour market ahead of the November 3 midterm elections.

An AP-NORC poll released Thursday found that 61 percent of respondents believed the US economy was worse off than when President Donald Trump took office in January 2025.

Economic analysts offered differing assessments of the latest figures. Kyle Moore, chief economist at the Century Foundation, said the report indicated that hiring was slowing significantly and that real wages were weakening.

Breyon Williams, chief economist at Groundwork Collaborative, said weak hiring combined with wage increases that were not keeping pace with prices was placing pressure on working households.

Trump has sought to counter concerns about the economy. In a Truth Social post on Monday, he described US employment figures as the "BEST Employment Numbers in HISTORY."

Signs of a Stalling Labour Market

Other recent indicators have also pointed to limited movement in the US labour market.

The Labor Department's Job Openings and Labor Turnover Survey, released Tuesday, showed little change in hiring and employment separations. The figures were consistent with what economists describe as a low-hire, low-fire environment, in which workers are generally staying in their existing jobs while businesses are adding relatively few new positions.

A separate report from ADP showed that private employers added 90,000 jobs during September.

Meanwhile, data from Challenger, Gray & Christmas showed that US employers announced more than 43,000 job cuts during September, an 18 percent decline from August.

The latest employment figures will also be closely watched by the Federal Reserve ahead of its October policy meeting.

The central bank is scheduled to meet on October 27 and 28 to consider whether to raise, lower or maintain interest rates.

According to CME FedWatch, financial markets were placing a 77.3 percent probability on the Federal Reserve keeping its benchmark interest rate in the 3.75 percent to 4 percent range. That compared with a 35.8 percent probability one week earlier.

US financial markets moved higher following the release of the jobs figures. In midday trading, the Nasdaq was up 1.5 percent, the Dow Jones Industrial Average had gained 0.6 percent and the S&P 500 was 1.1 percent higher.

Gold also rose, increasing 1.1 percent to $4,223.49 an ounce as investors continued to monitor signs of economic weakness and uncertainty.

The September employment report adds to growing evidence of a cooling US labour market, with weaker hiring, downward revisions to previous figures and slower wage growth now forming part of the economic picture heading into the midterm elections.