WASHINGTON – Employment in the United States grew by just 29,000 jobs in September, missing analysts’ expectations significantly, with the unemployment rate rising slightly to 4.2%, government data showed on Oct 2.
Adding to the weak data, the Bureau of Labour Statistics (BLS) also revised down job figures for July and August by a combined 60,000 jobs, the department said in a statement.
The revision to July’s data showed that the world’s largest economy lost jobs that month, as opposed to posting a gain of 21,000 as previously reported.
The data comes ahead of key midterm elections in November, when President Donald Trump’s Republican Party is facing a stern test over his handling of the economy.
Employment in most major sectors was largely unchanged, the BLS reported, with healthcare posting notable gains of 17,000.
The sector has propped up the labour market in the United States in the last year, as an ageing population requires more care both in hospitals and at home.
Still, September’s gains in the sector were slower than its average monthly gain of 33,000 over the last year.
Construction added 11,000 jobs and manufacturing 9,000 jobs, the data showed.
The financial sector continued its downward slide, losing 7,000 jobs in September and bringing its overall slump from a recent peak in May 2025 to 129,000.
Most of the losses in that sector have been among insurance companies.
Average hourly earnings for all employees were up 3%, the BLS said, with wages continuing to lag behind stubbornly high inflation – meaning most workers are seeing real wage losses.
Democratic Senator Elizabeth Warren seized on the data to criticise Trump’s performance since taking office in January 2025.
“Pay cheques are growing at their slowest rate in nearly seven years, outside of the Covid-19 pandemic,” she said in a statement.
“Since the start of Trump’s war, real wages have fallen 0.7% as his failed agenda keeps pushing prices up,” she said, referring to the US-Israeli war against Iran launched in late February.
The conflict has plunged the Middle East into violence and sent global energy prices skyrocketing, as Tehran’s retaliatory action has targeted Washington’s regional allies and choked a key trading route.
The data comes after the US Federal Reserve – which has a dual mandate to maintain inflation at a long-term 2% target while ensuring maximum employment – raised interest rates in September to address high prices. It hiked the fed funds rates by a quarter percentage point to a range of 3.75% to 4% – the first increase in three years.
The US labour market has been largely in balance in 2026, with modest job gains and a relatively steady unemployment rate.
That steadiness has allowed the Fed to focus on the inflation side of its mandate, but any weakness in the labour market may give policymakers pause. Raising interest rates tends to cool inflation but can also limit economic activity, which can affect the job market.
Raising interest rates tends to cool inflation but can also limit economic activity, which can affect the job market.
This week, two key Fed policymakers indicated that the central bank may not raise rates again at its October meeting, although markets continue to expect a further hike before the end of the year. AFP
