US adds 29,000 jobs in September, unemployment rises to 4.2%; revisions cut 60,000 more

U.S. employers added 29,000 jobs in September and the unemployment rate rose to 4.2% from 4.1%, the Bureau of Labor Statistics reported Friday. Economists had expected about 90,000 jobs in the LSEG poll cited by Fox Business, and 84,000 in the Dow Jones survey cited by CNBC.

The earlier months got worse too. August was revised to 133,000 from 162,000, and July to a loss of 10,000 from a gain of 21,000, so July and August together are 60,000 jobs lower than first reported.

Where the jobs came from

Private employers added 46,000 jobs and government cut 17,000, on BLS data. Health care and social assistance alone added 23,000, which is half of all private hiring. Take it out and the rest of the private economy added about 23,000 jobs in a month.

The information sector, which covers publishing, software, telecom and media, has now lost 120,000 jobs over twelve months, a 4.2% drop, from 2.86 million to 2.74 million. Federal employment is down 232,000 over the same stretch. Temporary help, often the first place employers cut when they get cautious, shed 10,900 jobs after two flat-to-down months.

The unemployment rate rose for a better reason than it looks

The jump to 4.2% reads like layoffs. The household survey says otherwise. The labor force grew by 485,000 in September and the participation rate rose to 61.8% from 61.6%. Household employment rose by 406,000, while the number of unemployed rose by only 78,000, to 7.11 million. More people came looking for work and most of them found it. The broader U-6 rate, which adds people working part time who want more hours, fell to 7.6% from 7.7%.

That does not make the payroll number good. The two surveys measure different things, and the payroll survey of employers is the one the market trades on. It shows hiring close to stalling.

The number behind the number: pay

Average hourly earnings for private workers rose 5 cents to $37.81, a 0.1% gain on the month and 3.0% from $36.70 a year earlier. The most recent consumer price index showed inflation of 3.4% over the year to August, on our economic calendar. That puts typical hourly pay about 0.4 percentage point behind prices. The average workweek held at 34.4 hours.

For an owner, that cuts both ways. Wage pressure is easing, which helps anyone budgeting a payroll for the holidays, but customers' paychecks are losing ground to prices, which is the risk for anyone selling to consumers. Restaurants kept hiring in September, adding 10,800 jobs.

605,380 independent restaurants are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 79,108 in CA, 54,058 in TX, 51,387 in NY. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

Markets and the Fed

Treasury yields fell after the release. At 8:52 a.m. the 2-year yield was 4.73%, down about 6 basis points from Thursday, and the 10-year was 5.19%, down about 5 basis points, on CNBC quote data. December S&P 500 futures were up 0.8%. The 10-year had closed at 5.29% on Wednesday, its highest close since May 2002, on Treasury data, as we reported.

Traders read the miss as lowering the odds of another Fed rate increase at the October 28 meeting, CNBC reported. The Fed watches the unemployment rate more than payrolls, and a 4.2% rate driven by people joining the labor force gives it less reason to move either way. The next big test is the September consumer price index on October 14.

Related: ADP's September report showed 90,000 private jobs, nearly twice what the government count found. 10-year T-note chart.

Sources: U.S. Bureau of Labor Statistics (Employment Situation, September 2026, via the BLS data API), CNBC, Fox Business, CNBC quote data, U.S. Treasury, CheckThisBiz. September payroll figures are preliminary and will be revised. Shares and real-pay comparison are our arithmetic. This is market information, not investment advice.