US employers added just 29,000 jobs in September, well below expectations, while the unemployment rate rose to 4.2%, according to government data released on Friday, pointing to a slowdown in hiring as the US heads towards pivotal midterm elections.Hiring fell sharply from a revised 133,000 in August, the labour department said. Economists had expected employers to add around 90,000 jobs last month.Revisions to earlier data also reduced combined July and August payrolls by 60,000 jobs.The unemployment rate increased from 4.1% in August to 4.2%. The rise came partly as 485,000 people entered the workforce in September, with not all of them finding jobs immediately.Average hourly wages rose 3% from a year earlier, marking the smallest year-over-year increase since May 2021.
Healthcare hiring slows as governments cut jobs
The September figures showed weaker hiring across several parts of the economy. Federal, state and local governments cut 17,000 jobs, while professional and business services companies reduced payrolls by 9,000.Healthcare companies added 17,000 jobs, but that was around half their average monthly gain of 33,000 over the past year.Bradley Saunders, an economist at Capital Economics, was quoted by news agency AP as saying the slowdown in healthcare hiring might reflect the Trump administration’s revocation of work authorisations for 350,000 Haitians.Construction companies added 11,000 jobs, while manufacturers increased payrolls by 9,000.The latest report comes after jobless claims remained low. Initial applications for unemployment benefits fell to 197,000 in the week ending September 26, the lowest level since mid-July.The four-week average fell to 200,000.Planned layoffs by US-based employers fell 18% in September to 43,281, while announced job cuts were down 20% from a year earlier.However, employers’ hiring plans were down 23% year-on-year and September’s total was the lowest for the month since 2011.
Jobs data puts focus back on Federal Reserve
The weaker hiring figures could draw greater attention from the Federal Reserve to its mandate of maximum employment. Several Fed officials had recently said inflation remained their primary focus.The US central bank has been dealing with inflation that has remained above its 2% target for more than five years.The latest employment figures could affect the debate over whether to keep interest rates unchanged at the Fed’s next meeting rather than raise them.The labour market has remained relatively resilient despite trade tensions, persistent inflation, high interest rates and the conflict with Iran, which has pushed energy prices higher.At the same time, indicators of worker confidence have weakened. The Conference Board’s consumer confidence index fell to its lowest level in more than a decade, with more than 28% of respondents expecting fewer jobs to be available in six months, compared with 14% who expected more.Glassdoor’s employee confidence index also fell last month to its lowest level since records began in 2016. It was the third record low for the index this year.“Employee confidence has been continuously grinding downward over the last year as workers grow increasingly anxious about everything from layoffs to AI,” Glassdoor chief economist Daniel Zhao said, as cited by AP.
Low hiring, low layoffs define job market
The latest data reflect a labour market in which employers are not cutting large numbers of existing workers but are also adding relatively few new employees.The labour department’s measure of gross hiring has remained subdued for more than two years.Glassdoor’s Zhao said workers were increasingly reluctant to leave their existing jobs because finding new employment could take longer.“They often feel stuck,” Zhao said. “Workers aren’t finding there’s opportunity on the open market to find a better job – one that pays more or offers better work-life balance.”The average unemployed person had been out of work for more than six months in August, the longest average period of joblessness since February 2022.The September jobs report is the last major employment report before the November 3 US midterm elections, when voters will decide whether President Donald Trump’s Republicans retain full control of Congress.Financial markets initially reacted positively to the jobs data. Futures for the S&P 500 and Nasdaq composite added to their gains, while the yield on the 10-year Treasury fell to 5.17% from 5.24% a day earlier.
