US hiring almost stalled in September. Will unemployment stay at 4.2% or go higher?
US employers added just 29,000 jobs in September and unemployment rose to 4.2%. The figures for October come out on Friday 6 November.
What happened
The closely-watched monthly employment report will be released on Friday. Economists expect little change in hiring from September’s disappointing update.
US employers added just 29,000 jobs in September, less than half of the almost 70,000 economists expected. Unemployment rose slightly to 4.2%, from 4.1% in August. Figures for July and August were cut by 60,000 jobs together, and pay per hour grew 3% over a year, the slowest rise in more than five years.
The Bureau of Labor Statistics, part of the US Labor Department, publishes the report for October on Friday , three days after the elections for Congress. Economists expect little change in hiring. Unemployment has stayed fairly steady since , when it reached 4.5%.
On the Federal Reserve, the US central bank, kept its main interest rate at 3.75% to 4%. Its chair Kevin Warsh said more figures would come before the next meeting on 8 and , and then the bank would be “better positioned to determine the right policy decision”. Ten of the 12 members voted to keep the rate, and two wanted a rise.
Most Fed members expected at least one more rate rise before the end of the year, and after the weak September report that rise now looks more likely in December. The economy grew at a yearly pace of 3.4% in July to September, while prices rose 3.7% over the year to September.
Sources: The Independent, The Guardian (2, 3), BBC
The Pattern
We looked for cases where a US monthly jobs report came right after a weak month, when hiring was between zero and 0.05% of all jobs (about 80,000 today) and unemployment rose by 0.1 points. Figures for the two months before had also been cut. We found six such reports from 2000 to 2025, out of 624 monthly reports since 1965. In five of them, unemployment did not fall. (Federal Reserve Bank of Philadelphia; Federal Reserve Bank of Philadelphia)
Show the other 4 cases
The Read
The past points to unemployment staying at 4.2% or going higher. In five of the six reports after a weak month like September, the rate did not fall, and it never moved by more than 0.1 points. It rose again in three of the six. More than 50,000 new jobs also came in three, and this year employers have added 68,000 a month on average, while economists expect little change from September’s 29,000.
There are reasons for doubt. Before rounding, the September rate was about 4.175%, so a fall of just 0.03 points would show as 4.1%. Weekly claims for unemployment benefits fell to 194,000, the lowest in three months, a sign that few people are losing jobs. All six past reports come from the same office, and four of them come in two pairs of back-to-back months, in 2011 and 2025. In President Donald Trump fired the head of that office, Erika McEntarfer, after a weak report.
Sources: The Guardian (2), The Independent (2), Federal Reserve Bank of St. Louis
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