The United States added fewer jobs than expected in September and wage growth slowed , signalling some caution among employers amid rising costs. Nonfarm payrolls increased 29,000 last month after a downward revision to the prior two months, according to Bureau of Labor Statistics data out Friday. That missed all estimates in a Bloomberg survey of economists. The unemployment rate rose to 4.2 per cent, partly reflecting a growing workforce. Robust consumer spending and vigorous business investment has supported hiring, but many cost-conscious employers have taken a measured approach to expanding headcount. That’s led to uneven hiring from month to month. Even so, layoffs remain subdued, pointing to a relatively stable job market. With unemployment still historically low, Federal Reserve officials can keep their attention focused on inflation as they consider when to raise interest rates again. Traders pared bets on a Fed rate hike this month following the data. “For the Fed, this number should be the nail in the coffin for an October hike,” Thomas Simons, chief U.S. economist at Jefferies LLC, said in a note. “It now looks more likely that the policymakers emphasizing that they have some more time before another hike is needed will remain patient.” The S&P 500 stock index rose following the release. Treasury yields were lower and the dollar declined. The latest jobs report is the last before the November midterm elections, in which the economy is expected to play a central role in how Americans vote. While the labour market is part of that picture, much of the focus has been on lingering concerns about the cost of living, even as consumers continue to spend. Industry breakdown Payrolls declined in local government, as well as in some of the industries most exposed to artificial intelligence, like information, professional and business services, and financial activities. Investment in data centres and other AI-related infrastructure helped support additional hiring in construction and manufacturing. Healthcare and leisure and hospitality employment also increased. Meantime, average hourly earnings edged up a weaker-than-expected 0.1 per cent from August and rose three per cent compared with a year earlier — the slowest annual wage growth since 2021. Average weekly hours were unchanged. The jobs report is composed of two surveys — one of businesses, which produces the payrolls figures, and another of households, which informs unemployment and participation statistics. The household survey also has its own measure of employment, which surged in the month. The participation rate — the share of the population that is working or actively looking for work — rose to a four-month high of 61.8 per cent in September. A broad measure of unemployment that includes discouraged workers and those employed part-time for economic reasons ticked down to the lowest since January 2025. Nearly a third of working Canadians are living paycheque to paycheque, a new payroll institute survey saysU.S. core CPI tops forecasts, bolstering case for rate hike The steadiness of the labour market has its drawbacks, though. In some cases, the lack of churn has left workers feeling stuck in jobs they dislike. It’s also made it harder for those who lose work to find another position. That may explain why many Americans are pessimistic about the job market, with fewer saying jobs are plentiful and more saying work is hard to find. “What strikes me is how stable it’s been for more than a year now,” said Richard Moody, chief economist for Regions Financial Corp. “A low-hire, low-fire narrative is still in place.” —With assistance from Mark Niquette, Michael Sasso, Jeffrey Sparshott and María Paula Mijares Torres. Bloomberg.com
U.S. job growth falls short of forecasts as firms remain cautious
