September's jobs report misses: US added just 29,000 jobs, unemployment ticked up

The US added just 29,000 jobs in September, missing expectations, as the unemployment rate ticked up to 4.2%, according to Labor Department data released Friday.

September's miss points to a labor market that's continuing to lose steam amid a long period of "low hire, low fire" dynamics. Average hourly earnings rose an anemic 0.1% from August and are up 3% year over year, a level that's likely below the current rate of inflation .

In addition, job gains in July and August were revised lower by a total of 60,000.

Economists surveyed by Bloomberg expected the latest data to show a gain of 90,000 jobs in September and expected the unemployment rate to remain at 4.1% for a third straight month.

The report looked "all around weak — but not tragic," economist Justin Wolfers wrote on X.

The jobs miss may be enough to sway Federal Reserve officials to hold interest rates steady this month as they remain more focused on bringing down inflation.

"The underlying story is still a low-hire, low-fire labor market," Vanguard senior economist Adam Schickling said in a statement. "This report strengthens the case for the Federal Reserve to remain patient."

While a 4.2% unemployment rate is relatively low and company layoffs have remained limited, corporations have been slow to make new hires.

Job gains in September came primarily from healthcare, which added 17,000 new roles. But that number was below the 33,000 average monthly gain in the sector over the past 12 months. Construction added 11,000 roles.

A breakdown of September's disappointing jobs report, sector by sector

Weak September jobs report likely to keep Fed on hold for October, with focus still on inflation

September jobs report live updates: US adds 29K jobs, labor demand 'flashing yellow'

In a hint of how white-collar employment has been weakening, the financial sector lost 7,000 jobs, bringing it down 129,000 total positions since its recent peak in May 2025. Many of the job losses have been concentrated among insurance carriers.

"2026 is better than 2025 for hiring. But there still isn't much hiring outside of healthcare and jobs to build/supply data centers," Heather Long, chief economist at Navy Federal Credit Union, wrote in a post on X .

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.