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U.S. added 29,000 jobs in September; unemployment ticks up to 4.2%

Employers added 29,000 jobs in September, well below economists' forecasts of 84,000 to 90,000, the Labor Department said Friday. Unemployment rose to 4.2%, prior months were revised lower, and traders cut the odds of a Federal Reserve rate hike later this month.

By US Brief desk · Updated 2026-10-02T16:31:00-07:00

AI-assisted · US Brief desk · Sources listed below

Frances Perkins Building, U.S. Department of Labor headquarters in Washington, D.C.

What happened

Nonfarm payrolls rose 29,000 after a downwardly revised 133,000 gain in August, the Bureau of Labor Statistics reported. Economists polled by Reuters had forecast 90,000 new jobs. A Dow Jones survey cited by CNBC expected 84,000. July was revised to a loss of 10,000 from a previously reported gain of 21,000. July and August together are now 60,000 jobs weaker than first estimated.

Why it matters

Soft hiring and cooler wages reduce the case for a quick follow-up hike, economists said, while inflation remains the Fed’s main worry. “This report strengthens the case for the Federal Reserve to remain patient,” Vanguard senior economist Adam Schickling said. Fitch’s Olu Sonola called it a reminder of a “low-hire, low-fire” labor market. Navy Federal Credit Union’s Heather Long told CBS hiring was weak outside a few sectors.

What’s next

The Fed’s next rate decision is due Oct. 28. September consumer prices are due Oct. 14. The Employment Situation for October is scheduled for Nov. 6.

More context

U.S. employers added 29,000 jobs in September and the unemployment rate rose to 4.2%, the Labor Department said Friday, a softer report than economists expected.

Details: Unemployment edged up from 4.1% as more people entered the labor force. Average hourly earnings rose 5 cents, or 0.1%, to $37.81 — up 3.0% over the past year. Health care added 17,000 jobs, construction 11,000, and manufacturing 9,000. Financial activities lost 7,000. Fox Business said private payrolls rose 46,000 while government employment fell 17,000.

Fed reaction: Traders cut bets on another Federal Reserve rate hike at the Oct. 27–28 meeting. CME’s FedWatch tool showed roughly a 17% to 22% chance of a quarter-point increase Friday, down from levels near 36% a week earlier, CNBC and Fox Business reported. The Fed raised its benchmark rate last month to a 3.75%–4.00% range, its first hike since 2023. Markets still lean toward a December move.

Markets: Major U.S. stock indexes rose after the data. In afternoon trading, Reuters put the S&P 500 up about 0.7%, the Dow up about 0.5%, and the Nasdaq up about 1.2%. Treasury yields fell at first, then reversed higher.

7 listed sources

References listed by US Brief; a source count is not a verification score.

Editorial sourcing notes

Core figures from BLS Employment Situation — September 2026 (USDL-26-1549), released 8:30 a.m. ET Oct 2: +29,000 payrolls; unemployment 4.2%; July revised to −10,000; August to +133,000 (−60,000 combined); AHE +0.1% m/m to $37.81 (+3.0% y/y); health care +17,000; construction +11,000; manufacturing +9,000; financial activities −7,000. Reuters (Lucia Mutikani) for forecast 90,000, Fed funds 3.75%–4.00%, Labor Day seasonality note, and market reaction. Fox Business for private +46,000 / government −17,000 and CME FedWatch ~79.5% hold in October. CBS (Aimee Picchi) and CNBC for economist reaction and FedWatch ~17% October hike. Stock index levels from Reuters afternoon wrap (intraday; markets closed 1 p.m. PT). No same-day White House statement cited. Fixed 4:24 PM PT Oct 2 per Robert: reconciled forecast with live fin-treasury-yields-peak — Reuters poll 90,000 and Dow Jones/CNBC 84,000 are both correct; both now attributed. Live article (84,000, CNBC consensus) is accurate; no live edit needed. Bullet now drops oldest finance bullet fin-nvidia-150b-buyback (Sep 28) instead of fin-stocks-oil-fed-hike (Sep 30).

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