US economy added 29,000 jobs in September, a slower pace than expected
Department of Labor releases closely watched September 2026 jobs report
September jobs report triggers market shift as interest rates expectations cool
Charles Payne and EJ Antoni analyze the disappointing September jobs report. They discuss the impact of only 29,000 jobs being added on interest rates and the unemployment rate, suggesting a Fed rate hike is off the table.
The U.S. economy added jobs at a slower pace than expected in September amid economic uncertainty.
What are the key findings of the September 2026 jobs report?
The Bureau of Labor Statistics on Friday reported that employers added 29,000 jobs in September. That figure was below the 90,000 estimate of economists polled by LSEG. The unemployment rate ticked higher to 4.2%, which was above economists' expectations of 4.1%, according to the LSEG poll.
Revisions were made to the payroll numbers for the prior two months, with July revised down by 31,000 from a gain of 21,000 to a loss of 10,000; while August was revised down by 29,000 from a gain of 162,000 to 133,000.
Taken together, employment in July and August is 60,000 lower than previously reported.
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What sectors added or lost the most jobs in September 2026?
Private payrolls grew by 46,000 jobs in September, below the gain of 85,000 that was estimated by economists in the LSEG poll. August's gain of 127,000 private sector jobs was revised down to 89,000.
Government payrolls contracted by 17,000 jobs in September. The sector's gain of 35,000 jobs in August was revised up to a gain of 44,000. The federal government shed 1,000 jobs, while state government employment contracted by 3,000 jobs and local government employment fell by 13,000 jobs. Most of the state and local job losses were in education.
The manufacturing sector added 9,000 jobs in September, just shy of the LSEG poll's expectations of 10,000. August's gain of 16,000 jobs in the sector was revised down slightly to 15,000.
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Economists expected employers to add 90,000 jobs in September. (Al Drago/Bloomberg via Getty Images)
Healthcare added 16,700 jobs in September, with most of the gains in ambulatory healthcare services (+13,400) and hospitals (+12,000), while nursing and residential care facilities lost jobs (-8,700). The gain was a slower pace than the average monthly gain over the prior 12 months (+33,000).
Construction employment changed little but added 11,000 jobs last month, just above the average of 10,000 over the prior 12 months. Employment in nonresidential specialty trade contractors trended up last month with a gain of 12,300 jobs.
Financial activities were also little changed and contracted by 7,000 jobs in September. The sector is down 129,000 jobs from a recent peak in May 2025, with most of the job loss in insurance carriers and related activities.
What does the September 2026 jobs report mean for the workforce?
The number of long-term unemployed, defined as those who have been jobless for 27 weeks or more, was essentially unchanged at 1.9 million in September. The long-term unemployed accounted for 27.1% of all unemployed people.
The number of people employed part-time for economic reasons was little changed at 4.5 million last month. These individuals would've preferred full-time employment but were working part-time because their hours had been reduced, or they were unable to find full-time jobs.
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The labor force participation rate was 61.8% in September, while the employment-population ratio was 59.2%. Both figures changed little in September and have shown little net change since January.
Jobs report revisions bounce around like a pinball machine, says Gerald Storch
Storch Advisors CEO Gerald Storch reacts to the September jobs report revisions, comparing the volatile labor market numbers to a pinball machine. Storch explains how the Labor Day calendar shift impacts September hiring data.
Average hourly earnings increased 3% in September, below the 3.2% increase that was expected by economists polled by LSEG.
What experts are saying about the September 2026 jobs report?
Vanguard senior economist Adam Schickling said that the "labor market remains resilient, but it is not accelerating. Hiring is subdued, layoffs remain remarkably low, and month-to-month payroll figures are likely to keep sending mixed signals. The underlying story is still a low-hire, low-fire labor market."
"This report strengthens the case for the Federal Reserve to remain patient. The labor market has not deteriorated sharply, but there is also little evidence that it has meaningfully strengthened, giving policymakers reason to wait for additional data," Schickling added.
Phil Camporeale, chief investment strategist at JPMorgan Wealth Management, said that the "combination of lower-than-expected jobs created, negative revisions to prior data and weaker wage growth are further evidence that the labor market is not a source of inflationary pressure."
"Ultimately, today's report is an ideal outcome for financial markets. Both the stock and bond markets should take solace from the Federal Reserve not needing to aggressively tighten financial conditions to slow down an overheating economy," Camporeale added.
Federal Reserve Chair Kevin Warsh and other policymakers will make their next interest rate decision in late October. (Daniel Heuer/Bloomberg via Getty Images / Getty Images)
What does it mean for interest rates?
The September jobs report increased the likelihood of the Federal Reserve leaving the benchmark federal funds rate unchanged at its current target range of 3.75% to 4% when it next meets in late October.
The CME FedWatch tool shows a 79.5% probability the Fed will hold interest rates steady in October, up from 75.6% a day ago and 35.8% last week.
It also shows a 66.2% chance of a 25-basis-point rate hike when the Fed meets in mid-December. A week ago, the CME FedWatch tool had shown a 51% chance of 50 basis points of hikes before the end of the year between the October and December meetings.
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What did the September 2026 jobs report mean for the market?
Markets rose following the September jobs report in part due to the reduced likelihood of interest rate hikes.
The benchmark S&P 500 Index was up 0.96% as of mid-morning. The Dow Jones Industrial Average was up 0.61%, while the Nasdaq Composite rose 1.63%.