U.S. — The U.S. unemployment rate rose to 4.2% last month as the economy added only 29,000 jobs, according to the U.S. Labor Department. Betsey Stevenson, a professor of economics and public policy at the University of Michigan, analyzed the data to examine shifting dynamics in hiring and workforce participation.

"Almost all the hiring in our labor market is being driven by healthcare," Stevenson said. The University of Michigan's Gerald R. Ford School of Public Policy has conducted monthly labor market analyses since 2020, focusing on employment trends and economic disparities, including a 2022 report linking education and healthcare sectors to women's employment growth. Stevenson served as a member of President Obama's Council of Economic Advisers and previously served as chief economist of the U.S. Department of Labor from 2010 to 2011, where she advised on labor market policies and workforce development initiatives.

The unemployment rate for Black workers rose by one percentage point last month, reaching 7.0 percent, compared to 6.0 percent in August 2026. The unemployment rate for Black women rose by 1.2 percentage points in September 2026, reaching 6.8 percent, while their employment-to-population ratio increased by 0.5 percentage points to 57.7 percent. The unemployment rate for Black workers is now more than double the rate for white workers. "When we break down the unemployment rate to groups like Black workers, we do see a lot more volatility," she said.

She described the current conditions as a low-fire, low-hire environment. "What I see is a continuation of a low-fire, low-hire labor market," she said. "That is a labor market where if you have a job, you're doing OK. You can hang on to it, but it's hard to get a new job." In September 2026, the share of unemployment due to voluntary quits fell to 10.5%, the lowest since May 2025, indicating a weaker labor market where workers are less likely to change jobs.

"We've seen a decline in the availability of opportunities, which has led fewer people to quit jobs," she said. This stagnation affects wage growth and mobility. "Most wage gains - big wage gains - come from changing jobs," she said. "On average, people's wages are not keeping up with inflation." She characterized the situation as a cycle that limits advancement for many workers.

"It's just a vicious cycle that leaves everybody sort of worse off. We're all much better off in the labor market if we can all chase our dreams, find those new opportunities. The opportunity we're leaving for something else is someone else's opportunity to get ahead." She also noted the role of technology in the current economic landscape. "AI is the engine of GDP growth, but it has not been an engine for job growth," she said.

"What happens in a weak labor market is all sorts of workers who are used to being able to churn and change jobs frequently find themselves getting left out," she said. She connected these labor dynamics to broader economic sentiment. "I think it's symbolic of a labor market that matches the K-shaped economy. People who are doing well are still doing well. And any kind of worker who's struggling to get their foot in the door, keep their foot in the door, get a promotion to the next thing - those are the people who are really struggling right now." Stevenson has been a visiting associate professor of economics at the University of Sydney, in addition to her roles at the University of Michigan and the National Bureau of Economic Research.

Despite the slow hiring, some sectors showed activity. "I'm looking at consumer confidence because there's always this, you know, disconnect. People say that they are really unhappy about the economy, but we did see some job growth in leisure and hospitality and people going out to restaurants," she said.

She emphasized the need for policy attention on these issues. "I do think it's time for every policymaker to have jobs and affordability front of mind, because that's certainly the front of mind of most Americans."

Timeline

On September 30, 2026, the U.S. Labor Department reported that the economy added 29,000 new jobs last month. The U.S. unemployment rate rose to 4.2% last month. Women accounted for 14,000 of the 29,000 new jobs added last month. Women held 50.1% of all U.S. jobs as of last month. The unemployment rate for Black workers rose by one percentage point last month.

On October 3, 2026, Stevenson stated, "This month, it was more even. Fourteen thousand of the 29,000 jobs went to women." She added, "If we actually look since July, a hundred percent of the jobs have gone to women, and we now see that women hold 50.1% of the jobs."

What's New

Women accounted for the majority of the jobs created in the 12 months preceding September 2026, driven largely by their dominance in the health care and social assistance sectors, which added 23,000 of September's 29,000 jobs. In September 2026, the Bureau of Labor Statistics reported that women accounted for 14,000 of the 29,000 new jobs added, continuing a trend where all net new jobs since July 2026 have gone to women.

Women held 50.1% of all U.S. jobs as of September 2026, according to the Bureau of Labor Statistics, reflecting a significant shift in employment trends. Women outnumbered men in the U.S. workforce for eight consecutive months as of September 2026, the longest such streak since 2010, per an Indeed analysis of government employment data.

Why It Matters

The rise in the unemployment rate to 4.2% and the minimal job growth of 29,000 positions indicate a cooling labor market where hiring has slowed significantly. The concentration of job gains among women, who now hold 50.1% of all U.S. jobs, marks a structural shift in the workforce composition. This trend is largely driven by the health care and social assistance sectors, which added 23,000 jobs in September alone. Meanwhile, Black workers face rising unemployment rates and greater volatility, with the rate for Black workers reaching 7.0 percent, more than double the rate for white workers.

The decline in voluntary quits to 10.5%, the lowest level since May 2025, suggests that workers are less willing or able to change jobs, limiting wage growth and career mobility. Her analysis points to a K-shaped economy where those with jobs remain secure, but those seeking entry or advancement face significant barriers. Policymakers are urged to focus on jobs and affordability as these labor market conditions affect consumer confidence and economic opportunity for diverse groups of workers.