U.S. Added 29,000 Jobs in September as Unemployment Rose to 4.2%

U.S. employers added 29,000 jobs in September while the unemployment rate rose to 4.2%, extending a period of unusually slow hiring, the Bureau of Labor Statistics reported Friday, October 2.

The monthly gain was below the 45,000 average for the prior 12 months. The number of unemployed people increased to 7.1 million, while the labor-force participation rate held at 61.8% and the employment-population ratio was little changed at 59.2%.

Where jobs were added—and lost

Health care added 17,000 jobs in September. Construction increased by 11,000 and manufacturing by 9,000. Financial activities lost 7,000 jobs. Most other major industries showed little change, underscoring the narrow base of the month’s growth.

Average hourly earnings for private-sector workers rose by 5 cents, or 0.1%, to $37.81. Earnings were 3.0% higher than a year earlier. The average workweek was unchanged at 34.2 hours.

Earlier months were revised down

The headline September number was accompanied by material revisions. BLS changed July payroll growth from a previously reported gain of 21,000 to a decline of 10,000. August was revised from 162,000 to 133,000. Together, those changes reduced previously reported employment by 60,000.

Reuters described the economy as remaining in a low-hiring, low-firing phase rather than showing clear evidence of a sudden, broad layoff wave. That distinction matters: payroll growth has slowed sharply, but weekly unemployment-claims data have not yet shown a comparable surge in dismissals. AskNovus recently covered the latest weekly jobless claims.

How to read the two surveys

The jobs report draws on separate surveys. The payroll figure comes from a survey of employers; the unemployment rate comes from a household survey. Because the samples and definitions differ, the two measures can move in different directions in a given month.

The report also differs from the private payroll estimate published earlier in the week. The ADP September estimate covers private employers and uses a different methodology, while BLS includes government jobs and is the federal statistical benchmark.

One month’s data can be volatile and later revised. The September report documents a reported slowdown; it does not, by itself, establish a single cause. Interest rates, business uncertainty, sector-specific demand and labor supply may all play roles, but the release does not quantify their individual effects.

Sources

• Bureau of Labor Statistics, Employment Situation—September 2026, released October 2, 2026.
• Reuters jobs-report analysis, October 2, 2026.

Featured-image credit: Van Tay Media/Unsplash. The image is illustrative.