The last official jobs snapshot before the midterms came in cold. The Bureau of Labor Statistics reported at 8:30 a.m. ET on October 2 that U.S. nonfarm payrolls grew by just 29,000 in September, far below economists' expectations of 84,000 to 90,000. The unemployment rate ticked up to 4.2% from 4.1%. Worse, the prior two months were revised down by a combined 60,000 — July flipped from a 21,000 gain to a 10,000 loss, and August was cut from 162,000 to 133,000.
The BLS kept its language restrained: nonfarm payrolls and the unemployment rate "changed little in September." Markets disagreed — actual hiring came in at roughly a third of forecasts (84,000 in the Dow Jones survey, 90,000 in the Reuters poll). It also fell short of the 45,000 average monthly gain over the prior 12 months.
Through September, the economy has added an average of 68,000 jobs per month this year — stronger than last year, when fewer than 10,000 were added monthly, but well below pre-pandemic norms. The number of unemployed stood at 7.1 million, with the jobless rate stuck in a narrow 4.1%–4.3% band since March.
The revisions stung. July went from a 21,000-job gain to a 10,000-job loss; August dropped from 162,000 to 133,000 — 60,000 fewer jobs across the two months combined. Reuters noted the seasonal-adjustment model as a likely culprit: Labor Day fell late in the month this year, a pattern that tends to understate September and overstate August. Economists had already cautioned that August's surprisingly strong reading was flattered by seasonal factors.
Nearly every major industry stood still. Healthcare added 17,000 jobs — the only meaningful growth, though slower than its 33,000 twelve-month average. Construction added 11,000, manufacturing 9,000. Financial activities shed 7,000 jobs; the sector has lost 129,000 since its May 2025 peak, mostly at insurance carriers.
The uptick in unemployment was partly good news: more people entered or re-entered the labor force, pushing the participation rate higher. Wage growth slowed for the fourth straight month to 3.0% annualized in September, the lowest since May 2021 — paychecks falling further behind as inflation accelerates.
CNN's verdict: a "low-hire, low-fire" labor market. First-time jobless claims hover near 57-year lows, corporate profits are robust, and there are no signs of broad layoffs. But headwinds to hiring are stacking up: an aging population, Baby Boomer retirements, the Trump administration's immigration crackdown shrinking labor supply, and rapid AI adoption reshaping demand for workers.
Reuters warned that fallout from the U.S.-Israel war with Iran — high energy prices and strained supply chains — is expected to start disrupting the labor market by year-end and into 2027.
Weak data lit a fire under markets instead: stocks and bonds both bounced, and the 10-year Treasury yield retreated to 5.18% from 5.24% a day earlier (it had touched 5.29% on September 30, the highest close since 2002). Investors now expect the Fed to hold rates steady at its October 27–28 meeting — a second hike right before the midterms, after September's increase, would look politicized. Most project a quarter-point hike in December.
This was the final official payrolls report before the election. The number 29,000 will follow voters into the booth.