NEW YORK — U.S. employers added 29,000 jobs in September, a figure that fell well below the approximately 90,000 jobs economists had expected. The U.S. unemployment rate rose to 4.2% in September from 4.1% in August, marking a shift in the labor market's trajectory.

The Labor Department revisions reduced combined July and August payrolls by 60,000 jobs, further dampening the outlook for recent hiring trends. Average hourly wages increased 3% in September compared to a year earlier, representing the smallest year-over-year gain since May 2021.

Sector-specific data revealed mixed results across the economy. Healthcare companies created 17,000 jobs in September, while construction companies added 11,000 jobs and manufacturers added 9,000 jobs. Conversely, federal, state, and local governments cut 17,000 jobs in September, and professional and business services companies cut 9,000 jobs.

Labor force participation saw a notable increase as 485,000 people entered the workforce in September. This influx of workers contributed to the rise in the unemployment rate despite the modest job gains reported for the month.

Broad economic indicators suggest growing pessimism among consumers and employees. Glassdoor's employee confidence index dropped in September to the lowest level in records dating back to 2016. Employers added an average of 68,000 jobs per month so far in 2026, a pace that remains sluggish compared to historical norms.

What's New

The Conference Board’s Expectations Index fell to 63.6 in September 2026, marking its third consecutive monthly decline and reflecting heightened pessimism about future job availability. The Conference Board, a business research organization, reported a 6.7-point decline in the U.S. Consumer Confidence Index in September 2026, reaching 81.9—the lowest level in over a decade.

The Conference Board's consumer confidence index fell to its lowest level in over a decade in October 2026, with 28% of respondents expecting fewer job opportunities in six months, reflecting broader economic concerns tied to the weak job growth data. Additionally, 26% of U.S. adults approve of the president's handling of the economy overall, according to a NORC poll conducted for the University of Chicago. In 2025, U.S. job growth averaged 9,700 per month—the weakest hiring outside a recession on record—setting a precedent for the current labor market's fragility.

Why It Matters

The September employment report shows a cooling labor market that is missing consensus expectations and facing downward revisions to prior months. The combination of weaker-than-expected job growth, rising unemployment, and slowing wage increases suggests that the labor market's momentum has decelerated significantly.

Consumer and employee confidence metrics have reached multi-year lows, indicating that households are bracing for potential economic headwinds. With more than 28% of respondents expecting fewer job opportunities in the near term, the data points to a shift in sentiment that could influence spending and hiring decisions in the coming months.

Upcoming economic data will provide further insight into the labor market and consumer outlook. The Institute for Supply Management will release its monthly report on manufacturing activity. The Federal Reserve will release minutes from its most recent policy meeting, offering clues about future interest rate decisions. Weekly unemployment claims data will be released on Thursday, and the University of Michigan will release its consumer sentiment index, which tracks household views on economic conditions.