The U.S. added only 29,000 jobs in September, far below forecasts, while unemployment rose to 4.2% and annual wage growth slowed to 3%.
Key Points:
- September payrolls rose 29,000, compared with expectations for about 90,000 jobs, while unemployment increased to 4.2%.
- July and August payroll estimates were revised down by a combined 60,000 jobs, showing weaker summer hiring than previously reported.
- Stocks rose and Treasury yields fell as traders reduced expectations for another Federal Reserve rate increase later this month.
U.S. Jobs Data
The Bureau of Labor Statistics said Friday that nonfarm payrolls increased by 29,000 in September, down sharply from a downwardly revised 133,000 jobs in August. Economists had expected about 90,000 new jobs and a 4.1% unemployment rate. Hiring missed expectations.
The report also weakened the recent employment picture because July payrolls were revised to a loss of 10,000 jobs from an earlier gain of 21,000. August was cut from 162,000 to 133,000, leaving the two months combined 60,000 jobs below previous estimates.
Unemployment rose as more people entered or returned to the labor force, while the labor force participation rate moved higher. Annual wage growth slowed for a fourth consecutive month to 3%, its lowest rate since 2021. Pay gains have cooled.
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Bret Kenwell Outlook
Financial markets moved higher after the report as traders reduced bets on another Federal Reserve rate increase later this month. The S&P 500 gained 0.9%, the Nasdaq rose 1.3%, and the Dow advanced about 380 points, or 0.75%. Treasury yields fell.
The 10-year Treasury yield declined to 5.21%, though it remained near multi-year highs. Bret Kenwell, U.S. investment analyst at eToro, said the report could revive the “bad news is good news” market narrative. He called weaker hiring for easier financial conditions “a poor tradeoff.”
“Lower rates may support markets in the near term, but a meaningful deterioration in hiring and income would eventually weigh on consumer spending and economic growth,” Kenwell said. He also warned that inflation remains a problem and that a labor-market breakdown would create a different one.
The September report extends a year of subdued hiring, with payroll growth averaging about 68,000 jobs per month through September. The pace remains well below pre-pandemic norms.
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