In a delayed but noteworthy report, U.S. employers added 119,000 net jobs in September, a figure more than double the consensus forecast of 50,000. The data, released by the U.S. Department of Labor (DOL), follows a seven-week lag caused by the recent federal government shutdown.
Despite the headline surprise, the underlying details raise caution flags. The unemployment rate ticked up to 4.4 percent in September — the highest level since October 2021 and up from 4.3 percent in August. The rise comes as an estimated 470,000 people entered the labour force in September, not all of whom found jobs immediately.
Revisions to previous reports further cloud the employment picture. The economy lost 4,000 jobs in August instead of gaining 22,000, as initially reported, and combined revisions for July and August trimmed some 33,000 jobs off earlier totals. This signals a significant slowdown in hiring over the past year: the DOL now estimates that the economy created an average of just 71,000 jobs per month in the last twelve months — far below the earlier estimate of 147,000.
Most of the September job gains were heavily concentrated in two industries: healthcare & social assistance, and leisure & hospitality. Healthcare firms added about 57,000 jobs, restaurants and bars 37,000, construction 19,000, and retail nearly 14,000. Meanwhile, manufacturing shed 6,000 jobs (marking the fifth straight monthly decline), and the federal government lost 3,000 positions — its eighth straight monthly drop.
Wages continue to advance only modestly: average hourly earnings rose 0.2 percent from August, and 3.8 percent over the past year — approaching but still above the threshold of 3.5 percent that the Federal Reserve monitors closely for inflation risks.
For the Federal Reserve, the data complicate an already delicate balance. While the headline job growth may reduce the urgency for a rate cut at the December meeting (scheduled for December 9-10), the weakness underneath supports the case for keeping policy accommodative given sluggish hiring outside key sectors.
Looking ahead, the next full jobs report for October and November will include the unemployment rate again. The DOL said it will not release the full October report due to calculation issues during the shutdown; instead, it will issue partial data along with the full November report on December 16.
