Key facts
- The U.S. economy added 29,000 jobs in September.
- The unemployment rate rose to 4.2% in September.
- Annual wage growth fell to 3.0% in September, the slowest since the pandemic.
- Employment gains for July and August were revised down by a combined 60,000 jobs.
- The information sector lost 10,000 jobs in September.
- Healthcare and construction sectors led job gains in September.
The U.S. labor market showed signs of cooling in September, with job growth slowing and the unemployment rate ticking upward, according to data released Friday. Employers added 29,000 jobs last month, a figure that fell short of expectations and followed downward revisions to previous months' gains. The unemployment rate rose to 4.2%.
This slowdown occurs against a backdrop of persistent inflation, which has strained consumers and markets. Wage growth has not kept pace with rising prices, with average hourly earnings increasing by 3.0% annually in September, the slowest rate since the pandemic. This has contributed to low consumer sentiment.
Several sectors experienced job losses, including the information industry (-10,000 jobs), the financial industry (-7,000 jobs), and professional and business services (-9,000 jobs). However, the healthcare and construction sectors were notable contributors to payroll gains, with manufacturing also adding 9,000 jobs. The construction sector's growth is partly supported by the data center boom.
Despite the cooling labor market, Federal Reserve officials have indicated a continued willingness to maintain higher interest rates to combat inflation, which was running at a 3.4% annual rate in August according to the Fed's preferred gauge. High mortgage rates and other borrowing costs have significantly impacted housing investment.