Openings hit their lowest level since March and pay growth trails inflation, leaving employers weighing hiring plans
U.S. employers added just 29,000 jobs in September 2026 and the unemployment rate rose to 4.2%, according to the Bureau of Labor Statistics (BLS) in Washington, D.C. The Oct. 2 report followed a Sept. 29 release from the U.S. Department of Labor showing job openings slid to 7.08 million in August, the lowest level since March, which adds to signs that hiring is cooling even as layoffs stay low.
The September gain came in well below forecasts. Economists surveyed by Bloomberg had expected about 90,000 new jobs.
Revisions made the picture softer. The BLS cut July's figure by 31,000, turning it into a loss of 10,000 jobs, and lowered August by 29,000 to 133,000. August had first been reported at 162,000.
Job openings fall as layoffs ease
The Job Openings and Labor Turnover Survey (JOLTS) showed openings dropping from a revised 7.34 million in July to 7.08 million in August, below the 7.2 million forecasters had projected, The Associated Press reported. Layoffs fell and quits retreated slightly. Gross hiring, which is measured before subtracting people who quit or lost their jobs, ticked up modestly but remains low, according to the survey.
That low-hire, low-fire pattern has defined much of 2026. HRD America has tracked the widening gap between job openings and actual hires throughout the year, and the August data suggests the gap hasn't closed.
"While hiring slowed to 29,000 jobs in September, few separations and jobless claims show that most people are holding onto their jobs," Danny Friel, lead economist at financial technology company Chime in New York, said.
What the slowdown means for U.S. employers
Employers, including businesses, nonprofits and government agencies, had added an average of 80,000 jobs a month this year before the September report, The Associated Press said. That compares with 9,700 a month in 2025 but remains well below the 166,000 monthly average of 2023 and 2024.
Health care led September with 17,000 new jobs, while construction and manufacturing posted slight gains. Average hourly earnings rose 5 cents, or 0.1%, to $37.81, and are up 3% over the past 12 months.
"This stability has helped keep consumers spending, but with wages trailing inflation since April ... that means fewer chances to move to a better-paying job," Friel said.
Private-sector data looked firmer. The ADP National Employment Report showed 90,000 jobs added in September, as HRD America covered in its look at September's hiring rebound and its warning on retention. The BLS count of 29,000 covers a broader set of employers.
"The September jobs report fell short of the hiring surge many expected ... While September is typically a period of increased hiring as businesses ramp up for the final months of the year, weaker-than-expected job growth suggests employers are still approaching hiring with caution amid broader economic uncertainty," said Deborah Saneman, CEO of Würk, a workforce management software company in Denver.
Energy costs and interest rates weigh on hiring plans
Higher energy prices tied to the war with Iran have pushed up inflation. The Federal Reserve raised interest rates in September 2026 for the first time in three years, citing higher prices, and the 10-year Treasury yield, which underpins many business loans, reached a 24-year high. Mortgage rates also jumped to 7.28% on Thursday from 7% the week before, the highest level in three years and the largest weekly rise since 2022, The Guardian reported. Higher borrowing costs can slow business expansion and, with it, hiring.
When the Fed raised rates on Sept. 16, chair Kevin Warsh described the labor market as consistent with full employment, though he said inflation had been too high for too long. Jobless claims also inched lower for a fourth straight week, according to the Department of Labor, and the unemployment rate remains below the 4.5% it reached in November 2025.
Confidence is fragile too. The Conference Board, a business research group, said consumer confidence sank to its lowest level in more than a decade, according to The Associated Press.
The pattern isn't new. HRD America wrote in July 2026 that the June 2026 jobs report showed a labor market walking on eggshells, with only 57,000 jobs added.
The September report is the final monthly jobs release before the midterm elections on Nov. 3, 2026.
