U.S. Jobs Report Shows Some Troubling Signs for Businesses, Labor

The September national jobs report, released Friday, Oct. 2, by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS), conveyed softness for the American labor market and some uncertainty for U.S. businesses. 

The new report showed total U.S. nonfarm payroll employment increased by 29,000 last month. This is a sharp drop from the revised total of 133,000 jobs gained in August and way under the 90,000 jobs that many economists had predicted for September.

Before the release of the new report, economists had cautioned that August’s surprisingly solid gains likely reflected some seasonal factors that juiced hiring activity. Softness also was apparent in the BLS’ revisions for July, which put that month into negative territory, with 10,000 jobs lost (versus the previously released gain of 21,000 jobs).

Through September, the economy has added an average of 68,000 jobs per month. While that figure through three quarters is higher than last year (when fewer than 10,000 jobs were added per month through Q3), the current hiring pace is running well below pre-pandemic averages.

The Oct. 2 report also showed the unemployment rate ticked up to 4.2%, versus 4.1% in the August report.

‘Weakness’ and ‘Growth’

Elise Gould, the senior economist at the Economic Policy Institute, called out “the notable weakness” in the U.S. economy.

“Payroll employment growth has averaged 50,000 over the last three months, but it continues to be relatively volatile,” she said in her analysis of the new report. “Four months of jobs losses over the last year, while some notable gains recorded as well. Economic uncertainty may be at play in the latest spell of weakness and downward revisions.”

The Trump administration took a most optimistic tone in the new numbers.

Secretary of Labor Keith Sonderling pointed to industry-sector job growth and government investments, stating, “President [Donald] Trump’s economic agenda continues to deliver for American workers and businesses. Construction employment [has marked] seven straight months of growth. Manufacturing employment also continues to expand. … Thanks to trillions of dollars of investment and the historic relief provided by the Working Families Tax Cuts, American workers are keeping more of what they earn while businesses have the certainty to invest and hire.”

Breaking Down the Numbers

Looking at September’s unemployment data:

• The number of unemployed Americans, at 7.1 million, changed little from the prior month. The jobless rate has remained in a narrow range of 4.1% to 4.3% since March.
• Among the major worker groups, the unemployment rate for people who are Black (7.0%) increased. The jobless rates for adult men (3.9%), adult women (3.6%), teenagers (14.5%), and people who are White (3.6%), Asian (2.9%) or Hispanic (4.7%) showed little change over the month.
• The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged, at 1.9 million. The long-term unemployed accounted for 27.1% of all unemployed people last month.
• Both the labor force participation rate, at 61.8%, and the employment-population ratio, at 59.2%, changed little. These measures have shown little net change since January.

Looking at September job gains by industry sector:

• Healthcare employment continued its upward trend (+17,000), but at a slower pace than the average monthly gain over the prior 12 months (+33,000). Employment continued to trend higher in ambulatory health care services (+13,000) and in hospitals (+12,000), while nursing and residential care facilities lost jobs (-9,000).
• Construction employment changed little (+11,000). The industry had added an average of 10,000 jobs per month over the prior 12 months. Employment in nonresidential specialty trade contractors continued to trend up (+12,000).
• Manufacturing was little changed (+9,000) but is up by 72,000 since a recent low in December 2025. Over the month, employment increased in plastics and rubber products manufacturing (+5,000) and in machinery manufacturing (+5,000).
• Financial activities dropped slightly (-7,000), and is down by 129,000 since a recent peak in May 2025, with most of the job loss in insurance carriers and related activities (-90,000).
• Stability was present in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; professional and business services; social assistance; leisure and hospitality; other services; and government.

Looking at September’s wage-and-hour data: 

• Average hourly earnings for all employees on private nonfarm payrolls edged up by 5 cents, or 0.1%, to $37.81. Over the past 12 months, average hourly earnings have increased by 3.0%. Year-over-year real wages, though, fell for the fifth consecutive month. In September, average hourly earnings of private-sector production and nonsupervisory employees rose by 7 cents, or 0.2%, to $32.60.
• The average workweek for all employees on private nonfarm payrolls remained at 34.4 hours. In manufacturing, the average workweek was unchanged at 40.6 hours, and overtime held at 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.8 hours.

“Slowing nominal wage growth suggests workers don’t have the leverage to bid up their wages,” Gould said. “Even with low unemployment, the depressed hires rate means workers aren’t finding new jobs to raise their wages. Slower wage growth means that, with higher prices, workers and their families continue to find it difficult to make ends meet.”

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