U.S. employers added just 29,000 jobs in September, a sharp drop from previous gains and well below expectations. The unemployment rate rose slightly to 4.2%, indicating a cooling labor market in the final jobs report before the midterm elections.
The job growth was significantly lower than forecasters' expectations, which ranged from just under 70,000 to 84,000 new jobs, while some had expected the unemployment rate to hold at 4.1%. Additionally, figures for July and August were revised down by a combined 60,000 jobs, extending a lackluster run for the job market.
Most of the gains in September were concentrated in the healthcare industry, which added 17,000 new jobs. In contrast, the information, financial, and professional industries saw losses. Wage growth also slowed, pointing to employer cautiousness in hiring amid rising costs and inflation pressure.
The slowing labor market suggests that employers are pulling back on hiring due to economic headwinds. This trend occurs as the U.S. economy faces maintained pressure from inflation and the approach of the midterm elections.