Friday, October 2, 2026·Focal News

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September hiring slows to 29,000 as unemployment edges up

U.S. employers added just 29,000 jobs in September, while revisions erased 60,000 jobs from the prior two months. Wage growth also lagged recent inflation, squeezing workers’ purchasing power as the Federal Reserve weighs its next move.

September hiring slows to 29,000 as unemployment edges up
U.S. employers added 29,000 jobs in September, well below economists’ expectations, and the unemployment rate rose to 4.2%, according to Labor Department figures released Friday, Oct. 2. The weak gain extends a slow stretch in hiring. The department also revised job growth for July and August downward by a combined 60,000; July’s total now shows a net loss. Most industries still added workers in September, but at a subdued pace. Healthcare, a reliable source of job growth, added 17,000 positions, while restaurants and bars added 11,000. Financial services and government lost jobs. The report points to a labor market with few broad layoffs but fewer openings for people seeking work. Sarah House, a senior economist at Wells Fargo, said the lack of turnover makes it harder for people who have lost jobs or are entering or returning to the workforce to find a position. Pay gains offered little relief. Average wages were up 3% from a year earlier, a slower increase than in August and likely insufficient to match inflation in recent months. When prices rise faster than earnings, workers’ paychecks buy less. The unemployment rate increased from 4.1% in August even as the labor force grew: 485,000 more people were working or looking for work in September. The share of adults participating in the labor force rose by two-tenths of a percentage point. The figures could influence the Federal Reserve’s next interest-rate decision. The central bank raised its benchmark rate by a quarter-point two weeks earlier to fight inflation. September’s weaker hiring may make another increase less likely at the Fed’s meeting later this month, though investors still expected at least one more hike by year’s end. Higher rates can cool price pressures but also raise borrowing costs for households and businesses.

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