U.S. employers added just 29,000 jobs in September while the unemployment rate rose to 4.2%, according to the latest government employment report.
WASHINGTON — The U.S. labor market showed signs of slower hiring in September, with employers adding only 29,000 jobs and the unemployment rate rising to 4.2%.
The figures were released Friday by the U.S. Bureau of Labor Statistics and came in below economists' expectations. The report also showed that previously reported employment gains for July and August were revised lower.
The latest numbers give a new look at the state of the U.S. economy as businesses continue to deal with higher costs, elevated energy prices and uncertainty surrounding interest rates.
What the September jobs report shows
The September employment report showed relatively little overall change across most major industries. Payroll employment increased by 29,000, while the unemployment rate moved up from 4.1% in August to 4.2%.
The labor force participation rate increased to 61.8% in September, according to the BLS. Average hourly earnings for private-sector workers increased by 0.1% during the month and were up 3.0% over the previous year.
Read the full September employment report from the U.S. Bureau of Labor Statistics
Earlier job numbers were revised lower
One of the notable details in the report was the revision to earlier months.
July's employment figure was revised from a gain of 21,000 jobs to a loss of 10,000. August was revised from 162,000 new jobs to 133,000.
Together, those revisions reduced previously reported employment growth for July and August by 60,000 jobs.
Which industries added jobs?
Employment changes were relatively limited across major parts of the economy in September.
Healthcare and several other sectors recorded gains, while some industries, including information and government, recorded employment declines.
The overall report did not show a broad wave of layoffs. Instead, the numbers point toward a labor market in which hiring has become slower.
The September numbers do not show a sudden collapse in employment. They show that businesses are adding workers at a much slower pace than earlier in the year.
What does 4.2% unemployment mean?
The unemployment rate measures the share of people in the civilian labor force who are without a job but are actively looking for work.
In September, the rate increased from 4.1% to 4.2%. The increase came alongside a rise in labor-force participation, meaning more people were counted as part of the workforce.
The unemployment rate therefore needs to be viewed alongside other measures, including hiring, participation and wage growth.
Why the jobs report matters for the Federal Reserve
Employment data is closely watched by the Federal Reserve because the central bank has to consider both the labor market and inflation when setting monetary policy.
The weaker-than-expected September report reduced expectations for an immediate additional rate increase at the Fed's October meeting, according to Reuters. However, upcoming inflation data and other economic indicators could still affect the central bank's decision. :contentReference[oaicite:1]{index=1}
That means the jobs report is important, but it is only one part of the information policymakers will consider.
How Wall Street reacted
U.S. stocks moved higher after the employment report was released. The weaker hiring numbers eased some concerns that a strong labor market could keep inflation pressures elevated.
The S&P 500 gained 0.7%, the Dow Jones Industrial Average rose 0.5%, and the Nasdaq Composite gained 1.2% on Friday, according to Associated Press market data. :contentReference[oaicite:2]{index=2}
Investors are now looking ahead to additional economic data and the Federal Reserve's upcoming policy meeting.
U.S. hiring slows in September
The latest reporting explains what the September jobs numbers mean for the U.S. economy and the Federal Reserve.
Read the latest Reuters reportWhat this means for American workers
For workers and people looking for jobs, the report suggests that finding new employment may take longer in some parts of the economy as businesses remain cautious about hiring.
At the same time, the report does not show a broad surge in layoffs. That distinction is important because a slower hiring market is different from a labor market experiencing widespread job losses.
Wage growth also continued, with average hourly earnings rising 3.0% over the past year.
What happens next?
The next major focus will be inflation data and the Federal Reserve's October policy meeting.
Economists and investors will also watch whether hiring remains weak in the coming months or begins to recover.
The next monthly Employment Situation report, covering October, is scheduled for release on November 6, according to the Bureau of Labor Statistics.
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