US adds just 29,000 jobs in September as unemployment rises to 4.2%

US employers added just 29,000 jobs in September, the Labor Department said on Friday, missing expectations by a wide margin as hiring slows. The unemployment rate rose to 4.2 per cent, up from 4.1 per cent the month before (WSJ; Barron’s).

Economists polled by The Wall Street Journal had expected 84,000 new jobs; Barron’s put the consensus at 90,000. September’s gain was down from a revised 133,000 in August, according to the Journal.

The weak report lands as the Federal Reserve fights inflation rather than weak hiring. The Fed raised its benchmark short-term interest rate last month for the first time in three years, and Chairman Kevin Warsh said “a pretty wide-ranging set of data, including the labor markets” showed “the economy has strengthened” (WSJ).

Investors are watching the numbers amid a bond-market selloff: Treasury yields hit their highest level in 24 years earlier this week before retreating, while mortgage rates have risen above 7 per cent. Layoff announcements in August hit their lowest level for that month since 2022, according to Challenger, Gray & Christmas, with many firms in “low-hire, low-fire” mode.

Chicago Fed President Austan Goolsbee said the monthly payroll figure is “not a reliable measure” of labour-market tightness given uncertainty about population growth from immigration policy, adding that unemployment just above 4 per cent is “pretty close to full employment” (Barron’s).