US Payrolls Rise 29,000 in September as Unemployment Edges Up to 4.2 Percent
US nonfarm payrolls rose by 29,000 in September, the Bureau of Labor Statistics said on 2 October, below the average monthly gain of 45,000 over the prior 12 months, while the unemployment rate edged up to 4.2 percent from 4.1 percent. The bureau described both as little changed. Revisions lowered July and August by a combined 60,000: July now shows a loss of 10,000 instead of a gain of 21,000, and August a gain of 133,000 instead of 162,000.
Three months of hiring average 51,000
Even with the revisions, payroll growth averaged 51,000 a month over the past three months, up from 23,000 a year earlier. A loss of 17,000 government jobs took the private gain of 46,000 down to 29,000. Within health care and social assistance, health care’s 17,000 was, on our calculation, about half its 12-month average monthly gain of 33,000; ambulatory care added 13,000 and hospitals 12,000, while nursing and residential care facilities lost 9,000. Manufacturing added 9,000 and is up 72,000 since a recent low in December 2025, while financial activities lost 7,000 and is down 129,000 since a recent peak in May 2025, 90,000 of that in insurance carriers and related activities.
The breadth of hiring narrowed. The diffusion index for 250 private industries fell to 49.0 from 57.6, below the 50 mark, which on our reading means slightly more industries cut jobs than added them. Temporary help services lost 10,900 jobs and information 10,000.
US payroll change by sector, September 2026
| Sector | September | August | July |
|---|---|---|---|
| Total nonfarm | 29,000 | 133,000 | -10,000 |
| Total private | 46,000 | 89,000 | 28,000 |
| Health care and social assistance | 23,000 | 35,100 | 13,300 |
| Construction | 11,000 | 16,000 | 18,000 |
| Manufacturing | 9,000 | 15,000 | 20,000 |
| Financial activities | -7,000 | -9,000 | -10,000 |
| Information | -10,000 | -18,000 | 4,000 |
| Government | -17,000 | 44,000 | -38,000 |
Monthly change in jobs, seasonally adjusted; July and August revised, August and September preliminary.
Labour force expands as unemployment edges higher
In the separate household survey, employment rose by 406,000 and the labour force by 485,000, lifting participation to 61.8 percent from 61.6 percent, still below the 62.5 percent of September 2025. The number of unemployed rose by 78,000 to 7.1 million, and, on our reading, the increase was concentrated among people entering or returning to the job market: reentrants rose by 152,000 and new entrants by 116,000, while job losers and people who completed temporary jobs fell by 45,000 and job leavers by 173,000.
US household survey, September 2026
| Measure | September | August | September 2025 |
|---|---|---|---|
| Unemployment rate | 4.2% | 4.1% | 4.4% |
| Participation rate | 61.8% | 61.6% | 62.5% |
| Employment to population ratio | 59.2% | 59.1% | 59.7% |
| Unemployed, millions | 7.109 | 7.031 | 7.605 |
| Long-term unemployed, millions | 1.944 | 1.930 | 1.815 |
Seasonally adjusted.
Longer hours lift weekly pay above hourly wage growth
Average hourly earnings of private employees rose 5 cents, or 0.1 percent, to 37.81 dollars, and were 3.0 percent higher than a year earlier. That is below the 3.4 percent annual rise in consumer prices in August, the latest reading available. With the workweek at 34.4 hours against 34.2 a year earlier, weekly pay of 1,300.66 dollars was 3.6 percent higher than a year earlier on our calculation, slightly ahead of that latest inflation reading. The longer week accounts for the gap: on our calculation it adds about 0.6 percent to weekly pay, which with the 3.0 percent hourly rise matches the 3.6 percent weekly gain.
Why it matters: On our reading, the rise in unemployment was concentrated among people entering or returning to the labour market rather than among job losers, while participation remains below its level a year earlier. With hourly pay growth below consumer price inflation, a workweek 0.2 hours longer than a year earlier is, on our calculation, what kept weekly earnings ahead of prices.
Outlook: The September consumer price index, due on 14 October, will give the first same-month comparison with September wage growth, and the October employment report follows on 6 November.
Sources: US Bureau of Labor Statistics, The Edge.
