US Adds Just 29,000 Jobs in September; Unemployment Hits 4.2% — SkimNews
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- Nonfarm payrolls rose only 29,000 in September versus the 84,000 economists expected, while the unemployment rate climbed to 4.2% from 4.1%, per the Bureau of Labor Statistics.
- August and July payrolls were revised down by a combined 60,000 jobs, with July flipping to a loss of 10,000, undermining the narrative of a rebound after weak spring hiring.
- Markets read the report as a Fed pause signal: odds the FOMC holds rates at its Oct. 27-28 meeting jumped to 82.8% (CME FedWatch), stock futures rallied, and Treasury yields slumped off multi-decade highs.
- Wage growth slowed to a 5-year low, with average hourly earnings up just 0.1% month-over-month and 3% year-over-year — the weakest annual print since May 2021 and below the 3% core inflation rate.
- Sector breakdown was narrow: healthcare added 17,000 jobs, construction 11,000, and manufacturing 9,000, while government shed 17,000, temp help services lost 11,000, and information services dropped 10,000 amid AI-related concerns.
- The household survey told a different story: employment rose 406,000, the labor force swelled by 485,000, and the participation rate hit 61.8% — its highest since May — while the broader U-6 unemployment measure fell to 7.6%, its lowest since January.
- GDP growth remains strong despite the hiring weakness: Q1 and Q2 were revised up to 2.5% and 2.2%, and the Atlanta Fed is tracking Q3 at 3.7% — a divergence economists cited as evidence of a 'low-hire, low-fire' economy.
Why it matters: A 29,000 payroll print against 84,000 expected is the kind of miss that locks in a Fed pause, saving borrowers from another rate hike at the Oct. 27-28 meeting. But the 3% wage growth is now being wiped out by 3% core inflation, eroding worker purchasing power heading into the holiday season — a direct hit to the consumer spending that has been keeping GDP growth above 2%.
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