September Jobs Report: US Adds 29,000 Jobs, Unemployment 4.2%
Quick answer: U.S. employers added just 29,000 jobs in September 2026, according to Bureau of Labor Statistics data released Friday, October 2. Economists had expected roughly 84,000 to 90,000. The unemployment rate rose to 4.2% from 4.1%, and July and August payroll estimates were revised down by a combined 60,000 jobs.
Key Takeaways
Payrolls grew by only 29,000 in September, well short of the 84,000 to 90,000 that economists had forecast.
The jobless rate climbed to 4.2% from 4.1% in August, a move most forecasters did not expect.
August hiring was cut to 133,000 from 162,000, and July now shows a loss of 10,000 jobs instead of a gain.
Average hourly earnings rose only 0.1% for the month and 3% over the year, still behind August's 3.4% inflation rate.
The weak reading lands weeks after the Federal Reserve's first rate hike in more than three years, complicating its next move.
Hiring across the United States nearly stalled in September. The Bureau of Labor Statistics said on Friday, October 2, 2026, that nonfarm payrolls grew by just 29,000 last month, while the national unemployment rate edged up to 4.2%. Both numbers came in weaker than Wall Street had predicted, and revisions to the prior two months made the picture softer still.
How weak was the September jobs report?
Forecasts going into the release ranged from about 84,000 new jobs, the estimate cited by ABC News, to roughly 90,000, the forecast CBS News attributed to data firm FactSet and the figure CNN and CoinDesk also cited. The actual gain of 29,000 fell short of every one of those benchmarks by a wide margin.
The unemployment rate added to the disappointment. Analysts had expected it to stay at 4.1%, according to CNN and CoinDesk, but it rose a tenth of a point to 4.2%.
Pay growth also cooled. CoinDesk reported that average hourly earnings increased only 0.1% from August, compared with expectations of 0.3%. On a yearly basis, wages were up 3%, below the 3.2% forecast and slightly under August's 3.1% pace.
Downward revisions to July and August
The headline number was not the only soft spot. The bureau lowered its estimates for the previous two months by a combined 60,000 jobs, CNN reported. August, initially reported as a 162,000-job gain, now stands at 133,000. July flipped from a modest increase of 21,000 to a decline of 10,000.
CNN noted that some economists had already warned that August's strong first print probably reflected seasonal quirks that made hiring look better than it was.
After the changes, the economy has averaged about 68,000 new jobs per month so far in 2026, according to CNN's reading of BLS data. That is an improvement on last year, when monthly gains averaged under 10,000, but it remains far below the roughly 120,000 jobs a month the country added on average before the pandemic.
Why are employers pulling back on hiring?
Several pressures are weighing on businesses at once. CBS News said firms appear to be holding off on new hires as energy costs surge and inflation stays elevated. ABC News linked the higher prices to the war with Iran, which pushed gasoline costs up and lifted inflation to a three-year high earlier this year. Annual inflation was 3.4% in August, more than a full percentage point above the Federal Reserve's 2% goal.
CNN listed a broader set of threats to hiring, including an aging population, the fast spread of artificial intelligence in the workplace, higher oil prices, policy uncertainty and the conflict with Iran.
Household confidence is also shaky. ABC News reported that consumer sentiment last month fell close to the lowest reading in the 74-year history of the University of Michigan's survey.
Signs the labor market is not collapsing
Not every indicator is flashing red. Data released Thursday by outplacement firm Challenger, Gray & Christmas showed layoffs through September were 40% lower than in the same stretch of 2025, CBS News reported. September layoffs alone were 20% below the year-earlier level and the lowest in four years.
Spending has held up as well. Government figures cited by ABC News show consumer spending, roughly two-thirds of the economy, climbed 0.6% month over month in August, its strongest gain since March 2025. Economic output also grew in the three months ending in June despite fears that the war would trigger a downturn.
In other words, companies are not shedding workers in large numbers. They are simply adding fewer of them, a pattern that can make it harder for people who are already out of work to land a new role.
What does this mean for the Federal Reserve?
The report puts the central bank in a difficult position. Last month the Fed raised its benchmark rate by a quarter of a percentage point, its first hike in more than three years, in an effort to cool prices. Fed Chair Kevin Warsh said at the time that "inflation is too high and has been for too long," ABC News reported.
ABC News reported that CME Group's FedWatch tool, which tracks market pricing, shows roughly a one-in-three chance of another increase in October. CoinDesk wrote that the weaker labor data could give policymakers room to hold rates steady even with inflation still elevated.
Financial markets reacted quickly. According to CoinDesk, the yield on 10-year Treasuries slid to 5.17%, down 7 basis points, while the 2-year yield eased to 4.71%. Nasdaq futures rose about 1.2% after the data came out.
What happens next
CNN described the story as developing, and economists will be watching whether September's slowdown proves to be a blip or the start of a longer cooling trend. The Fed's next decision on interest rates, and the path of inflation as energy prices respond to events in the Middle East, will shape how quickly employers feel confident enough to expand payrolls again.
What this means for you
For job seekers, the main takeaway is that openings are being filled more slowly, not that layoffs are surging. That calls for a steady, targeted search rather than panic.
Widen your search: with fewer new roles being created each month, apply across several related job titles and consider contract or temporary positions that can lead to permanent offers.
Expect longer hiring timelines: employers that are cautious about costs often add interview rounds or pause postings, so follow up politely and keep several applications active at once.
Weigh pay against prices: wages grew 3% over the past year while inflation ran at 3.4% in August, so compare any salary offer with your real cost of living before you accept.
Protect your current role: if you are employed, low layoff numbers suggest jobs are relatively secure, but it is a sensible time to update your resume and build skills, especially in areas touched by AI.
Workers who are already looking should also keep an eye on next month's report and on the Fed's October decision, since higher borrowing costs typically affect hiring with a delay of several months.
Frequently Asked Questions
How many jobs did the US add in September 2026?
The U.S. economy added 29,000 jobs in September 2026, according to Bureau of Labor Statistics data released on October 2. That was far below forecasts that ranged from about 84,000 to 90,000.
What is the US unemployment rate in September 2026?
The unemployment rate rose to 4.2% in September from 4.1% in August. Economists had expected the rate to hold steady at 4.1%.
Were the July and August jobs numbers revised?
Yes. August was revised down to 133,000 jobs from 162,000, and July was changed from a gain of 21,000 to a loss of 10,000. Together the two months were lowered by 60,000 jobs.
Did wages go up in September 2026?
Average hourly earnings rose 0.1% from August and 3% from a year earlier, both below forecasts. With annual inflation at 3.4% in August, pay gains are still trailing price increases.
Will the Federal Reserve raise interest rates again in October?
Markets see roughly a one-in-three chance of another hike in October, according to CME Group's FedWatch tool as reported by ABC News. Some analysts say the weak jobs data could give the Fed room to keep rates unchanged.
Sources
Published October 2, 2026. This article was compiled from the sources listed above with AI-assisted writing and automated fact-checking. We update stories when new verified information becomes available.