The September jobs report shows US hiring slowed sharply, with employers adding just 29,000 jobs while the unemployment rate rose to 4.2%. The Bureau of Labor Statistics released the September Employment Situation report on Friday, October 2, 2026, at 8:30 a.m. ET, and the numbers came in well below what economists had expected.
September Hiring Misses Forecasts by a Wide Margin
The US economy added only 29,000 nonfarm payrolls in September, far below the roughly 90,000 jobs economists polled by Bloomberg had forecast. It was also well short of the 45,000-a-month average of the prior 12 months, marking one of the weakest jobs reports of 2026. The unemployment rate ticked up a tenth of a point to 4.2% from 4.1% in August, and the number of unemployed people reached 7.1 million. The jobless rate for Black workers rose to 7.0%, while rates for other major groups showed little change.
Revisions painted an even weaker picture of the summer. July's gains were rewritten from a 21,000-job increase to a loss of 10,000 jobs, and August was cut by 29,000 to 133,000 — a combined downward revision of 60,000. Taken together, the economy has added only about 51,000 jobs a month over the last three months, a pace many economists describe as barely above break-even in a "low hire, low fire" labor market.
Where the Jobs Came From
Healthcare once again carried what little growth there was, adding 17,000 jobs — a weaker-than-usual showing for the sector. Construction added 11,000 jobs and manufacturing added 9,000, while government payrolls fell by 17,000. Private payrolls overall rose 46,000, according to the Associated Press.
Wage growth also cooled. Average hourly earnings edged up 5 cents to $37.81, a 3.0% gain over the year — the smallest 12-month increase since May 2021 and below the 3.4% consumer inflation rate recorded in August. Labor force participation ticked up to 61.8%, and JPMorgan economist Michael Feroli noted the unemployment rate rose partly because 485,000 people entered the workforce, which he called a positive sign.
What the Weak Report Means for the Federal Reserve
The report arrived just weeks after the Federal Reserve raised interest rates on September 16, and less than a day after Fed official Lorie Logan publicly called for "50 bps or more" in further hikes. Markets took the message as a sign the hiking cycle may pause: odds of another increase at the Fed's late-October meeting collapsed to roughly 1-in-5, per CME FedWatch data, and stocks rallied on the bad news — the S&P 500 closed up 0.73% at 7,722.72, within 1% of its August record, while the Nasdaq jumped 1.19% to 27,190.86.
Bitcoin held near $87,000 after the data. The timing is politically charged: this was the final jobs report before the November midterm elections, and it lands in a moment when polls suggest many Americans feel the economy has worsened.
The Takeaway
September's 29,000-job print, the steep downward revisions, and the 4.2% unemployment rate all point to a labor market running out of steam. Whether that is a gentle glide toward balance — as optimists like Feroli argue — or the start of a sharper turn will become clearer with the next jobs report on Friday, November 6, 2026, and the Fed's October 27–28 meeting.
Sources: The Fiscal Times, Oct 2, 2026; WXYwaves market brief, Oct 2, 2026; Divergence, Oct 2, 2026; MoneyCheck, Oct 2, 2026