US job growth slows sharply in September; unemployment rate rises to 4.2%
SPY•US payrolls increased by 29,000 in September, below economists’ 90,000 forecast, while the unemployment rate rose to 4.2% from 4.1% in August. Economists said a late Labor Day likely distorted payroll figures.
1. Payroll growth slows
Nonfarm payrolls increased by 29,000 in September after a downwardly revised 133,000 gain in August. Economists had forecast a 90,000 increase. Seasonal adjustment volatility and the late Labor Day holiday likely contributed to the weaker figure and August’s revision.
2. Labor market and Fed
The report showed no signs of a broad increase in layoffs, and first-time applications for unemployment benefits had been hovering at 57-year lows. Economists expected high energy prices and strained supply chains linked to the US-Israel war with Iran, along with tariffs, to disrupt employment later this year and into 2027. The Federal Reserve raised its benchmark rate by 25 basis points last month to a 3.75%-4.00% range; markets priced in a roughly 22% chance of another increase at its October 27-28 meeting, down from about 69% a week earlier.
