The U.S. job market slowed during the month of September, according to new data Friday from the Bureau of Labor Statistics.
The economy created only 29,000 jobs, fewer than economists expected. The unemployment rate rose to 4.2%.
The average hourly wage of workers increased only 0.1% from the previous month and 3% from last year. Friday’s data marks the sixth consecutive month where wages have lagged behind inflation. The BLS will release September inflation figures on October 14.
In addition, 60,000 jobs were revised from the initial figures of previous months.
“The change in total nonfarm payroll employment for July was revised down by 31,000, from +21,000 to -10,000, and the change for August was revised down by 29,000, from +162,000 to +133,000,” the BLS said in a statement.
Overall, September hiring was the third lowest this year — surpassed only by a loss of 156,000 jobs in February, when DOGE cut tens of thousands of federal workers, and the loss of 10,000 jobs in July, many in local school systems that laid off teachers over the summer.
Overall, economists expected 84,000 jobs to be created, the employment rate unchanged at 4.1% and incomes up 3.1% from last year, according to a Dow Jones survey.
Friday’s data is the last monthly jobs report to be released before the U.S. midterm elections.
For months, the Republican Party and President Donald Trump have faced declining poll numbers on the economy, as trade wars rage with close allies like Canada, wars in Iran and Ukraine drag on and tariffs continue to disrupt the global economy.
Democrats hope to overturn majorities in the House and Senate by hammering the Republican Party on affordability, gas prices and inflation. The September jobs report could provide them with another data point to help demonstrate that Americans are worse off today under Trump.
On top of these problems, global bond yields have reached levels not seen in decades. This week, yields on 10- and 30-year U.S. Treasury bonds rose to their highest levels since 2002, and as a result, the average 30-year fixed mortgage rate jumped to 7.6%.
That’s on top of the fact that gas prices remain nearly 50% higher than at the end of February, when the United States and Israel launched war against Iran, and commercial diesel fuel prices are 70% higher than earlier this year.
Hiring nevertheless continued, although the overall September figure was lower than the 133,000 additional jobs created in August, even after revisions.
Stocks jumped sharply after the data was released as a weaker jobs market makes it less likely that the Federal Reserve will raise interest rates when it meets later this month. But by late morning, stock indexes had halved their gains.
US Treasury yields initially fell sharply, but resumed their advance as the morning progressed.
The month’s gains can largely be attributed to the health care sector, which created 17,000 jobs. Yet even those occurred “at a slower rate than the average monthly gain over the previous 12 months,” the BLS said.
Construction jobs increased by 11,000 last month, as widespread construction of AI data centers continues to drive demand for skilled workers. The manufacturing sector created 9,000 jobs.
In many major industries, including oil and gas, professional services and hospitality, the agency said employment “showed little change.”
Economists often focus on the leisure and hospitality sector as an early indicator of consumer behaviors. Despite moderate hiring in this sector, most data shows that consumer spending has remained stable.
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