US Job Growth Misses the Mark as Unemployment Ticks Up

US job growth slowed to a crawl in September, with employers adding just 29,000 jobs — far below the 90,000 economists polled by Reuters had expected, the Associated Press reported. The unemployment rate ticked up to 4.2 percent, and revisions wiped a combined 60,000 jobs off the July and August totals. It was the final official jobs report before the November midterms, and it landed with a thud: the labor market young workers are trying to break into is barely hiring.

The details were worse than the headline. July's payroll count was revised from a small gain into an outright loss of 10,000 jobs, while August's gain shrank to 133,000. Teenagers face 14.5 percent unemployment — more than triple the national rate — and young adults aged 20 to 24 sat at 7.1 percent in August, according to the Center for Economic and Policy Research. The official payroll estimate was so weak it did not even clear the bureau's threshold for statistical significance — a technical way of saying the headline number could easily have been noise.

The jobless rate for Black workers jumped a full point to 7.0 percent. Pay is barely keeping up, either. Average hourly earnings rose just 3.0 percent over the year, the slowest pace since May 2021, while prices have climbed faster — leaving workers with shrinking real purchasing power. Nearly half a million people entered or re-entered the labor force in September, a sign that more Americans are looking for work, not that more are finding it.

A Low-Hire, Low-Fire Market Punishes Newcomers

Economists describe today's market as "low-hire, low-fire": companies are not shedding workers, but they are not adding many either. That combination is brutal for anyone trying to get in the door — recent graduates, career changers and people returning to work. Fitch Ratings' head of US economics called the report "a disappointing jobs report" and a reminder that the low-hire, low-fire market never went away, according to Reuters.

The entry-level squeeze is real. Indeed's chief executive recently called the application process a "vicious cycle," questioning how a thousand applications for one role could all be unqualified, according to Business Insider. The numbers back up the frustration: job postings now stay open an average of 61 days, and at companies adopting AI, headcount gains have skewed heavily toward senior roles over junior ones, with AI cited in roughly one in five layoffs announced this year.

One Indeed economist described hiring, quitting and layoffs as settling into "a rhythm" in which employers keep the workers they have and hold off on hiring the ones they don't, as SHRM reported. Healthcare was the one sector still hiring at scale, adding 17,000 jobs — but even that was about half its average monthly gain over the past year, while finance, information and professional services all shed positions.

How the Week Built Up to the Miss

The weak print caught markets off guard because the week's earlier data looked fine. A private payroll report released Wednesday beat expectations, briefly lifting hopes for a solid official number. On Thursday, new unemployment claims fell to 197,000 — below 200,000 for the third straight week and near multi-decade lows — while announced layoffs dropped to their lowest September level in years.

Economists offered two caveats. Reuters reported that payrolls tend to underperform when the Labor Day holiday falls late in September, as it did this year, making the seasonal adjustment noisier than usual. And White House economic officials framed the unemployment uptick positively, arguing that more people are re-entering the labor force because they see opportunity — a glass-half-full reading of a glass-half-empty report.

Weak US Job Growth Puts the Fed — and the Midterms — on Watch

The report reshapes the Federal Reserve's calculus. The central bank raised its benchmark rate last month for the first time in three years, citing higher prices, and meets again in late October. After Friday's numbers, markets slashed the odds of another hike — one widely watched measure put the chance of the Fed standing pat at more than three in four. Fitch's economists said the data give the Fed "little reason" to keep an October hike on the table, with the coming inflation data now the deciding factor.

Politically, the timing could hardly be worse for the White House. An AP-NORC poll released this week found 61 percent of Americans say the economy is worse off than when the current administration took office, and only about one in six approve of its handling of the cost of living. Friday's report was the last official snapshot of the job market voters will get before the midterms; the next one lands after the election.

With US job growth running this cold, the message for young workers is uncomfortable: the economy is not shedding jobs, but it is barely creating them, and the competition for each opening keeps climbing. That makes this a market for patience, persistence — and applying anyway. This story is part of our Business coverage; for more on the hiring picture, see our earlier report on the August jobs openings data.