US job growth slows; markets lift on data

September jobs report shows modest employment gain

Nonfarm payroll employment increased by 29,000 in September 2026, indicating only a small rise in overall U.S. employment. The unemployment rate was 4.2%, with 7.1 million people counted as unemployed. These figures suggest limited change in labor market conditions over the month.

Employment across all major industries changed little in September, pointing to broadly stagnant hiring rather than sector-specific swings. The unemployment rate has remained within a narrow range of 4.1% to 4.3% since March, underscoring a labor market that has been steady but not accelerating.

The labor force participation rate stood at 61.8% in September, while the employment-population ratio was 59.2%. Both measures showed little movement, indicating that the share of people either working or actively looking for work, and the share employed, were largely unchanged.

Wage growth remains subdued

Average hourly earnings for all employees on private nonfarm payrolls edged up by $0.05, or 0.1%, in September to $37.81. Over the past 12 months, average hourly earnings rose by 3.0%.

The small monthly increase in wages, combined with the modest pace of job creation, points to a labor market that is not generating strong upward pressure on pay. With earnings growth holding at a 3.0% annual rate, paychecks are rising, but not rapidly.

Downward revisions to summer employment

September’s report also included revisions to earlier data. July’s change in total nonfarm payroll employment was revised down by 31,000, to a decline of 10,000 jobs.

August’s payroll change was revised down by 29,000, to a gain of 133,000 jobs. Taken together, these revisions reduced previously reported employment gains in July and August by a combined 60,000.

The latest figures show that, over the 12 months prior to September, monthly payroll gains had averaged 45,000. September’s 29,000 increase falls below that recent average, highlighting a slower pace of job growth.

Market reaction and policy expectations

U.S. stock-index futures rose following the release of the September labor market data. In early New York trading, futures for the S&P 500 Index (SPX) were up about 0.8%, while contracts for the Nasdaq 100 Index (NDX) climbed about 1%.

The softer-than-expected payroll increase and subdued wage gains eased pressure for an additional Federal Reserve interest rate increase later in October. Market pricing for a further 25-basis-point rate hike fell markedly around the time of the report, reflecting reduced expectations of imminent policy tightening.

The combination of weaker job growth, downward revisions to prior months, and modest wage inflation shaped a more favorable backdrop for risk assets. Equity futures responded positively to the perception of lower near-term interest rate risk.