A long-delayed US employment report delivered a mixed signal for the economy, showing stronger hiring in September but also the highest unemployment rate in nearly four years.
The United States added 119,000 jobs last month, far outpacing economists’ expectations of 50,000 positions, according to FactSet. However, the unemployment rate climbed to 4.3 percent, reflecting a labor market losing momentum as tariffs, persistent inflation and high interest rates continue to weigh on economic activity.
The report, postponed seven weeks because of the federal shutdown, revealed that earlier figures were even weaker than previously thought. August’s modest gain of 22,000 jobs was revised to a loss of 4,000, while July’s estimate was cut by another 7,000 positions.
Health care and social assistance remained the strongest engine of hiring, adding 57,100 jobs and accounting for nearly half of the month’s total gains. Leisure and hospitality followed with 47,000 new positions, boosted by warmer-than-usual weather. Losses surfaced in transportation and warehousing, which shed 25,300 jobs, as well as temporary help services and manufacturing.
Despite the September uptick, overall job growth remains on track for its weakest year since the pandemic and, before that, the Great Financial Crisis. Heather Long, chief economist at Navy Credit Union, said the broader picture shows a labor market struggling to regain momentum. “The job market was really weak in the summer, and it didn’t improve much in September,” she said, noting that average monthly gains over the past four months have hovered in the low 40,000s.
The rising unemployment rate was driven primarily by more Americans entering the labor force and seeking work rather than a surge in layoffs. Still, the tightness of opportunities is evident. BLS data shows it now takes job seekers an average of six months to find a position. Continuing unemployment claims reached 1.974 million in early November, a four-year high, even as initial claims remained historically low at 220,000.
Economists describe the environment as a “low-hire, low-fire” labor market, one that may be shifting toward a more concerning “no-hire, start-to-fire” trend as more industries begin cutting staff.
The uneven data complicates the Federal Reserve’s next interest rate decision. Kathy Bostjancic, chief economist at Nationwide, said the September report “could throw cold water” on expectations for another rate cut at the Fed’s December meeting. The rebound in hiring, she noted, reduces the urgency for further monetary easing.
Because of the shutdown, September’s numbers will be the most current full snapshot available when the Fed meets on December 10. Updated October and November figures will not be released until the following week, leaving policymakers to weigh an incomplete and uncertain picture of the labor market.
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