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The U.S. added only 29,000 jobs in September as job market lacks spark
Confirmed
In Short: Employers added only 29,000 jobs in September, below economists' forecasts.
Employers across the U.S. added 29,000 jobs in September, a figure well below economists' forecasts of 90,000 new jobs, signaling that some businesses are holding off on hiring amid economic headwinds such as surging energy prices and higher inflation.
According to financial data firm FactSet, economists had expected a stronger job market recovery following August's robust employment report and the Federal Reserve's first interest rate hike in three years.
Jerry Tempelman, vice president of economic and fixed income research at Mutual of America, noted, "September's nonfarm payroll gain of just 29,000 jobs raises questions about the durability of the labor market after the Federal Reserve's first interest rate increase since 2023."
Heather Long, chief economist at Navy Federal Credit Union, added, "Only healthcare and construction were hiring, and it was weak." She also pointed out that September's wage growth is the lowest since May 2021.
The unemployment rate stood at 4.2% in September, up slightly from 4.1% in the prior month. Layoffs through September have declined 40% from the same period a year earlier, according to recent data.
Financial services firms shed 7,000 jobs last month, and private payrolls grew by 46,000 jobs, below the estimated gain of 85,000. August's gain of 127,000 private sector jobs was revised down to 89,000.
Government payrolls contracted by 17,000 jobs in September, with federal government shedding 1,000 jobs, state government employment contracting by 3,000 jobs, and local government employment falling by 13,000 jobs.
Adam Schickling, senior economist at Vanguard, said, "The labor market remains resilient, but it is not accelerating. Hiring is subdued, layoffs remain remarkably low, and month-to-month payroll figures are likely to keep sending mixed signals."
Phil Camporeale, chief investment strategist at JPMorgan Wealth Management, stated, "The combination of lower-than-expected jobs created, negative revisions to prior data and weaker wage growth are further evidence that the labor market is not a source of inflationary pressure."
Chris Phelan, White House Council of Economic Advisers Chair, told Yahoo Finance that he does not expect the Federal Reserve to raise interest rates again this year after a weaker-than-expected September jobs report.
Steve Rick, chief economist at financial services firm TruStage, said the downward revisions put August's "rebound into perspective." He added, "The increase in the nation's unemployment rate warrants close attention."
What this adds
The September jobs report shows a sharp slowdown in job growth, with employers adding only 29,000 jobs, compared to the previous month's revised figure of 133,000 jobs.
The unemployment rate rose slightly from 4.1% in August to 4.2% in September, indicating a slight weakening in the labor market.
Despite the slowdown, the labor market remains resilient with low layoffs, but hiring is subdued, and wage growth is weak.
Background
The US economy added 29,000 jobs in September, a slower pace than expected.
The flash S&P Global US Composite Purchasing Managers Index (PMI) rose to 58.4 in September from 56 in August, signaling a marked acceleration in private-sector activity.
What's confirmed
- The sector's gain of 35,000 jobs in August was revised up to a gain of 44,000.
What's still developing
- "Across America, people don't like this labor market. It's not hard to see why. There's still not much hiring going on."
- "One month doesn't make a trend, and monthly payroll numbers can bounce around quite a bit. What matters more is whether the three-month trend continues to show a labor market that is gradually cooling rather than falling off a cliff."
- These individuals would've preferred full-time employment but were working part-time because their hours had been reduced, or they were unable to find full-time jobs.
- American firms are choosing to hold steady rather than hire or fire staff The US jobs market saw a sharp slowdown in September, with employers adding just 29,000 jobs in the final update before the midterm elections.
- "For the Fed, these numbers do not make a case for a rate increase in October," he said.
- "Inflation has wiped out wage gains since March. That's a real financial squeeze."