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The US added just 29,000 jobs in September, down from 133,000 in August, while unemployment rose to 4.2%, according to revised Bureau of Labor Statistics figures. Economists called the slowdown notable but "not disastrous", and expectations of further Fed rate rises are fading. The numbers land a month before the midterms, with an AP/NORC poll putting Trump's approval on the cost of living at a record-low 17%.
The American jobs market has slowed sharply, with employers adding just 29,000 jobs in September — down from 133,000 in August, according to revised figures from the Bureau of Labor Statistics. Unemployment ticked up from 4.1% to 4.2%, and headcounts were little changed across both the technology and retail sectors, as reported by the BBC.
The numbers land a month before the midterm elections, handing the White House an unwelcome economic headline at the worst possible moment in the political calendar.
September's 29,000 new jobs represent a dramatic deceleration from August's already modest 133,000, and the figures are revisions — meaning the labour market was weaker than first thought even before the autumn. The unemployment rate's rise to 4.2%, while small in absolute terms, confirms the direction of travel: hiring is stalling and the cushion of low joblessness is thinning.
The weakness is broad rather than concentrated. Technology and retail — two sectors that together employ tens of millions of Americans — saw headcounts barely move, suggesting the slowdown is not an artefact of one industry's bad month but a wider cooling of employer demand.
The data sharpens a picture that has been building for months. After the hiring surge of the early decade, the American labour market has been gradually losing momentum, and September's figures suggest the deceleration is accelerating rather than stabilising.
!Panoramic view of Lower Manhattan, New York, seen from Jersey City in September 2020 Credit: King of Hearts, CC BY-SA 4.0, via Wikimedia Commons
Economists are watching the sector detail for clues about what is driving the slowdown. One notable pocket of commentary concerns the industries feeding the artificial intelligence boom: Jeffery Roach, chief economist at LPL Financial, pointed to "goods producing sectors that support the AI boom" as an area to watch — a reminder that even the economy's hottest story has a physical supply chain of factories, components and construction that is sensitive to the cycle.
The contrast with the AI narrative is striking. While AI-linked wealth fuels a housing boom in San Francisco, the labour market data suggests the boom's benefits are not translating into broad-based hiring. Technology headcounts were flat even as valuations soar — the familiar pattern of an economy where capital thrives and labour treads water.
Trade policy is the other shadow over the numbers. The labour market is cooling even as tariff policy reshapes North American commerce: the US-Canada trade war has redrawn supply chains across both economies, though there are signs of a possible thaw as the two countries near a deal. Employers facing uncertain input costs and shifting trade rules have every reason to delay hiring decisions.
The professional reaction to the figures has been measured rather than panicked. George Brown, senior economist at Schroders, described recent job gains as a "rollercoaster", capturing the volatility of a series that has lurched between surprisingly strong and disappointingly weak prints.
Bradley Saunders, North America economist at Capital Economics, was blunter in his assessment: the numbers are "not disastrous". The labour market is softening, in his reading, not collapsing — a slowdown that warrants attention rather than alarm.
That distinction matters for what comes next. A gradual cooling gives the Federal Reserve room to respond with lower interest rates; a sudden deterioration would raise the spectre of recession. For now, the data sits in the uncomfortable middle: weak enough to worry about, not weak enough to force emergency action.
!Construction work at the Eccles Federal Reserve building in Washington DC, February 2025 Credit: G. Edward Johnson, CC BY 4.0, via Wikimedia Commons
Roach drew the direct line from the jobs data to monetary policy. "Given the overall softness of the labour market, the likelihood of two Fed hikes is going lower," he said — or, more precisely, expectations of further rate increases are fading as the labour market softens.
The remark captures the central bank's bind. Earlier in the cycle, the question was how many more rate rises might be needed to contain inflation; now, with hiring faltering, the conversation has flipped towards how quickly and how far rates might need to fall to support the economy. Financial markets have already begun pricing in that shift, and central banks elsewhere are navigating the same uncertainty — European central banks have even moved gold out of North America amid rising global uncertainty.
For the Fed, the risk is moving too late. Labour markets turn slowly and then all at once, and by the time a slowdown is unmistakable in the data, the economy may already need support.
The figures collide awkwardly with the president's economic messaging. Donald Trump has insisted that America is the "hottest" nation in the world, even as he conceded this week: "I've done a very bad job of explaining how good the country is doing."
Voters, however, appear unconvinced by either the boast or the excuse. An AP/NORC poll released on Thursday found just 17% of Americans approve of Trump's handling of cost-of-living issues, and 26% approve of his handling of the economy overall — both new lows, and both below the lowest marks recorded for his predecessor, Joe Biden.
The cost-of-living number is the more politically dangerous of the two. Elections a month away will be fought on grocery bills, rents and pay cheques, not on GDP statistics — and a president polling at 17% on the issue voters care about most is a president in trouble. The White House will need the next round of data to tell a very different story, and quickly.
The calendar now dominates everything. With the midterms a month away, each economic release becomes a campaign event, and the October jobs report — due before polling day — could be the most politically consequential data release of the year.
Watch the revisions: the September figures were themselves revised, and the Bureau of Labor Statistics' subsequent updates will show whether the slowdown is deepening. Watch the sectors: if technology and retail remain flat while goods-producing industries soften further, the "not disastrous" verdict may need revisiting. And watch the Fed, whose next moves will signal whether the central bank shares the market's growing conviction that the labour market needs help.
For an administration that promised economic boom times, 29,000 jobs is an awkward number to defend.
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Employers added just 29,000 jobs in September, down from 133,000 in August (revised figures from the Bureau of Labor Statistics), and unemployment rose from 4.1% to 4.2%.
Headcounts were little changed across technology and retail. LPL Financial's Jeffery Roach also pointed to "goods producing sectors that support the AI boom".
Calmly: Schroders' George Brown called job gains a "rollercoaster", while Capital Economics' Bradley Saunders said the numbers are "not disastrous" — a softening, not a collapse.
Weaker hiring reduces expectations of further rate rises; Roach said "the likelihood of two Fed hikes is going lower", with markets now looking toward rate cuts.
It lands a month before the midterms. An AP/NORC poll found just 17% approve of Trump's handling of cost-of-living issues and 26% of his economic handling overall — both new lows, below Biden's lowest marks.
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