September nonfarm payrolls grew by just 29,000, and the unemployment rate was 4.2%. But to understand this figure, you need to compare it against two benchmarks.
The first is expectations: the market had broadly expected an increase of 84,000 to 90,000, but the result didn’t even reach the bottom of that range. The second is the previous figures—July and August were revised down by a combined 60,000 jobs. August was revised from 162,000 to 133,000, while July was revised from a gain of 21,000 to a loss of 10,000. In other words, it’s not just that September was weak; the “respectable” picture of the previous two months has also been erased.
By sector, healthcare added 17,000 jobs, construction added 11,000, and manufacturing added 9,000, while financial activities shed 7,000. Since May 2025, the financial sector has lost a total of 129,000 jobs. Average hourly earnings rose 3.0% year over year, but just 0.1% month over month, suggesting wage growth is also cooling. The labor force participation rate rose to 61.8%—people are returning to the labor force, but jobs haven’t kept pace, which is exactly why the unemployment rate is rising.
The market reaction was immediate: interest rate swaps show traders are no longer fully pricing in another rate hike this year; interest rate futures put the odds of no change in October at around 77%. At the same time, some have cautioned that September’s figures may have been affected by the late Labor Day date and seasonal adjustment models, so a single month’s data doesn’t necessarily mean the labor market has materially deteriorated. After all, initial jobless claims remain near a 57-year low, and layoffs haven’t picked up. For now, this looks more like “low hiring, low firing.”
My take: these figures have pretty much taken another rate hike this year off the table, but don’t rush to treat them as a signal of easing. Weak employment and inflation that still won’t fully cool—that’s classic stagflation anxiety, and it may not be an unambiguously positive sign for risk assets.
Do you think the labor market is genuinely weakening, or is this seasonal adjustment noise? Let’s discuss in the comments.
#USSeptemberNonfarmPayrollsUpJust29000UnemploymentRateRisesTo42%
The first is expectations: the market had broadly expected an increase of 84,000 to 90,000, but the result didn’t even reach the bottom of that range. The second is the previous figures—July and August were revised down by a combined 60,000 jobs. August was revised from 162,000 to 133,000, while July was revised from a gain of 21,000 to a loss of 10,000. In other words, it’s not just that September was weak; the “respectable” picture of the previous two months has also been erased.
By sector, healthcare added 17,000 jobs, construction added 11,000, and manufacturing added 9,000, while financial activities shed 7,000. Since May 2025, the financial sector has lost a total of 129,000 jobs. Average hourly earnings rose 3.0% year over year, but just 0.1% month over month, suggesting wage growth is also cooling. The labor force participation rate rose to 61.8%—people are returning to the labor force, but jobs haven’t kept pace, which is exactly why the unemployment rate is rising.
The market reaction was immediate: interest rate swaps show traders are no longer fully pricing in another rate hike this year; interest rate futures put the odds of no change in October at around 77%. At the same time, some have cautioned that September’s figures may have been affected by the late Labor Day date and seasonal adjustment models, so a single month’s data doesn’t necessarily mean the labor market has materially deteriorated. After all, initial jobless claims remain near a 57-year low, and layoffs haven’t picked up. For now, this looks more like “low hiring, low firing.”
My take: these figures have pretty much taken another rate hike this year off the table, but don’t rush to treat them as a signal of easing. Weak employment and inflation that still won’t fully cool—that’s classic stagflation anxiety, and it may not be an unambiguously positive sign for risk assets.
Do you think the labor market is genuinely weakening, or is this seasonal adjustment noise? Let’s discuss in the comments.
#USSeptemberNonfarmPayrollsUpJust29000UnemploymentRateRisesTo42%