U.S. Payrolls Grow by Just 29,000 in September as Unemployment Ticks Up to 4.2%
The United States economy added a meager 29,000 jobs in September, falling well short of consensus forecasts, while the unemployment rate ticked up to 4.2%. Released Friday morning, the Nonfarm Payrolls Report signals sharp labor market cooling that could prompt the Federal Reserve to hold interest rates steady despite persistent inflation.
The Bottom Line
- Payroll Miss: The economy added only 29,000 jobs against a consensus expectation of 90,000, compounding steep downward revisions for July and August.
- Unemployment Increase: The jobless rate rose to 4.2%, surpassing both the projected 4.1% and August’s 4.1% reading.
- Market Reaction: Treasury yields dropped sharply—with the 10-year yield falling 7 basis points to 5.17%—while equity index futures and gold pushed higher.
Parsing the September Nonfarm Payrolls Report and Revisions
According to the government’s Nonfarm Payrolls Report released Friday morning, the economy added 29,000 jobs last month. That figure missed the consensus forecast of 90,000 by a wide margin and slowed drastically from August’s gain.
Extensive negative revisions to prior months revealed underlying weakness that went unnoticed in real time. August’s job gain was marked down to 133,000 from the originally reported 162,000. Meanwhile, July’s previously reported gain of 21,000 was entirely erased, converted instead into a net job loss of 10,000.
Wage growth also lost momentum. Average hourly earnings rose just 0.1% in September, missing forecasts for a 0.3% increase and matching August’s downwardly revised pace. On a year-over-year basis, average hourly earnings expanded by 3%, trailing expectations of 3.2% and slipping below August’s 3.1% reading.
| Metric | September Actual | Consensus Forecast | August Data (Revised) |
|---|---|---|---|
| Nonfarm Payrolls | +29,000 | +90,000 | +133,000 |
| Unemployment Rate | 4.2% | 4.1% | 4.1% |
| Average Hourly Earnings (MoM) | 0.1% | 0.3% | 0.3% |
| Average Hourly Earnings (YoY) | 3.0% | 3.2% | 3.1% |
Bond Yields Slide and Equities Rally on Rate-Hold Speculation
Financial markets immediately priced in the implications of a stalling labor market for monetary policy.
Fixed-income markets reacted swiftly to the weaker data. The 10-year Treasury yield slumped by 7 basis points to settle at 5.17%, while the 2-year yield experienced a matching 7-basis-point drop to 4.71%.
Equities and alternative assets moved upward in response to the prospect of a more accommodating central bank stance. U.S. stock index futures extended their prior gains on the session, with the Nasdaq rising 1.2%. At the same time, gold climbed over 1% and the greenback weakened against major international currencies. Bitcoin maintained upward momentum, trading just underneath $87,000 in the minutes immediately following the data release.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
