US adds 29,000 jobs as unemployment rises with a bigger labor force

The U.S. economy added 29,000 jobs in September, according to the Bureau of Labor Statistics, well short of the roughly 84,000 economists expected in a Dow Jones survey. The unemployment rate rose to 4.2% from 4.1%, but the household data point less to a firing wave than to more people entering the labor market.

The labor force grew by 485,000 people to 170.26 million, lifting participation to 61.8% from 61.6%, according to Trading Economics' summary of the household data. In July, participation had fallen to 61.4%, its lowest since early 2021. Household employment rose by 406,000. The number of unemployed rose by 78,000 to 7.11 million. Meanwhile, the unemployment rate for job losers held at 1.9% for a second month, BLS data show, and the broader U-6 measure, which counts the underemployed and marginally attached, eased to 7.6% from 7.7%.

Layoff data point the same way. Job cuts through September were down 40% from the same period a year earlier, and September's total was the lowest in four years, according to outplacement firm Challenger, Gray & Christmas, as reported by CBS News. Taken together, the figures describe more people looking for work while employers neither shed staff nor add many.

Payroll growth was concentrated in three industries. Health care added 17,000 jobs, though even that was at "a slower pace than the average monthly gain over the prior 12 months," the BLS said. Construction added 11,000, which NBC News attributed to demand for skilled workers on AI data center projects, and manufacturing added 9,000. The BLS said employment in professional services, oil and gas, and hospitality "showed little change." The Guardian's reading of the same release put the information, financial and professional industries in negative territory.

ADP's private payroll count, released two days earlier, was stronger at 90,000, and Nela Richardson, ADP's chief economist, called it "a strong report." The two counts disagree on the total but agree on where white-collar demand stands. ADP showed professional and business services down 11,000 and financial activities down 16,000. Education and health services, by contrast, added 55,000.

Revisions made the summer weaker than first reported. July was revised to a loss of 10,000 jobs from a gain of 21,000, and August to 133,000 from 162,000, removing 60,000 jobs from the earlier readings. Hiring for the year stands at 612,000, according to an NBC News analysis of BLS data.

Pay is losing momentum. Average hourly earnings rose 0.1% from August to $37.81, up 3% from a year earlier, which The Guardian described as the slowest annual growth in more than five years. Consumer prices rose at a 3.4% annual rate in August. ADP's pay data show the premium for moving remains wide: base pay for job-changers rose 4.8% year over year, against 3.0% for workers who stayed put. Few workers are taking advantage, according to Nicole Bachaud, a labor economist at ZipRecruiter. "Employees aren't moving from their positions," she told The Washington Post. "Stability remains the leading strategy for workers who have a position already. And so we're not seeing a lot of pressure from employers to raise wages."

The slowdown is uneven. Unemployment among Black Americans rose a full percentage point to 7%, double the rate for white Americans, The Guardian reported; the BLS put the August figure at 6.0%. The Post described a labor market with few layoffs and few openings that falls hardest on college graduates, who are entering it as companies adopt AI tools capable of entry-level tasks.

The Federal Reserve raised interest rates in September, citing inflation. The September figures cooled expectations for another increase at the Fed's final meeting before the Nov. 3 midterms, with a hike now more likely in December, The Guardian reported. The next jobs report is scheduled for Nov. 6, after the vote.