U.S. job growth slows sharply in September as unemployment rises to 4.2%
US jobs report weakens as payroll gains slow and unemployment rises to 4.2% Markets eye a Fed hold as Treasury yields fall and stocks move higher
U.S. employers added far fewer jobs than expected in September, signaling a weaker labor market. Nonfarm payrolls increased by 29,000, while the unemployment rate rose to 4.2%, according to the Bureau of Labor Statistics.
The report also showed downward revisions to prior months, with July turning into a small job loss and August revised lower. Taken together, the changes pointed to softer hiring momentum than previously thought.
Markets reacted positively to the weaker data because investors saw it as increasing the chances that the Federal Reserve will keep interest rates unchanged at its lateOctober meeting. Treasury yields fell, and stock futures moved higher after the release.
Wage growth also slowed, with average hourly earnings up 0.1% in September and 3% over the past year, the lowest annual pace since May 2021. Most of the month’s job gains came from health care, construction, and manufacturing, while government, temporary help, and some service sectors lost jobs.