US job growth slowed sharply in September as employers added only 29,000 positions, far below expectations of nearly 90,000. The unemployment rate climbed to 4.2% from 4.1% in August, showing weaker hiring momentum. Revisions also cut 60,000 jobs from July and August, underlining a cooling labour market.
Healthcare created 17,000 jobs, below its average pace of 33,000. Construction added 11,000 jobs, while the financial sector lost 7,000, continuing a decline seen since 2025. Wage growth was modest, with average hourly earnings rising just 0.1% month‑on‑month and 3% year‑on‑year, slower than inflation. Labour force participation stayed at 61.8%, and long‑term unemployed stood at 1.9 million, making up 27% of total jobless.
Markets reacted positively as the weak report reduced chances of a Federal Reserve rate hike in October. Treasury yields fell, with the 10‑year near 5.18% and the 2‑year at 4.72%. US stock futures surged, with the Dow up 439 points or 0.85%, the S&P 500 gaining 0.79%, and the Nasdaq 100 rising 1.01%.
Economists described the situation as “low‑hire, low‑fire,” noting limited layoffs but weak hiring. Fitch Ratings said the report gives the Fed little reason to raise rates soon, while Vanguard economists suggested patience in policy decisions.