U.S. employers added a surprisingly solid 119,000 jobs in September, the government said, issuing a key economic report that had been delayed for seven weeks by the federal government shutdown.
The unemployment rate rose to 4.4% in September, the highest since October 2021 and up from 4.3% in August, the Labor Department said Thursday. The unemployment rate rose partly because 470,000 people entered the labor market—either working or looking for work—in September and not all of them found jobs right away.
The increase in payrolls was more than double the 50,000 economists had forecast. But Labor Department revisions showed that the economy lost 4,000 jobs in August instead of gaining 22,000 as originally reported. Altogether, revisions shaved 33,000 jobs off July and August payrolls.
The data, though late, was welcomed by businesses, investors, policymakers, and the Federal Reserve. During the 43-day shutdown, they’d been groping in the dark for clues about the health of the American job market because federal workers had been furloughed and couldn’t collect the data.
The report comes at a time of considerable uncertainty about the economy. The job market has been strained by the lingering effects of high interest rates and uncertainty around Trump’s erratic campaign to slap taxes on imports from almost every country on earth. But economic growth at midyear was resilient.
Healthcare and social assistance firms added more than 57,000 jobs in September, restaurants and bars 37,000, construction companies 19,000 and retailers almost 14,000. But factories shed 6,000 jobs—the fifth straight monthly drop. The federal government, targeted by Trump and billionaire Elon Musk’s DOGE cost cutters, lost 3,000 jobs, the eighth straight monthly decline..
Average hourly wages rose just 0.2% from August and 3.8% from a year earlier, edging closer to the 3.5% year-over-year increase that the Federal Reserve’s inflation fighters like to see.
The latest reading on jobs Thursday makes a rate cut by the Federal Reserve at their next meeting in December less likely. Many Fed officials were already leaning against a cut next month, according to minutes of their October meeting released Wednesday. Steady hiring suggests the economy doesn’t need lower interest rates to expand.
The September jobs report will be the last one the Fed will see before its Dec. 9-10 meeting. Officials are split between those who see stubbornly high inflation as the main challenge they need to address by keeping rates elevated, and those who are more concerned that hiring is sluggish and needs to be supported by rate reductions.
Economists expected to see a continuation of what was happening in the spring and summer: weak hiring but few layoffs, an awkward pairing that means Americans who have work mostly enjoy job security – but those who don’t often struggle to find employment.
The job market has been strained this year by the lingering effects of high interest rates engineered to fight a 2021-2022 spike in inflation and uncertainty around Trump’s campaign to slap taxes on imports from almost every country on earth and on specific products—from copper to foreign films.
Labor Department revisions in September showed that the economy created 911,000 fewer jobs than originally reported in the year that ended in March. That meant that employers added an average of just 71,000 new jobs a month over that period, not the 147,000 first reported.
President Donald Trump’s crackdown on illegal immigration is expected to reduce the number of people looking for work, which means that the economy can create fewer jobs without sending the unemployment rate higher.
With September numbers out, businesses, investors, policymakers and the Fed will have to wait awhile to get another good look at the numbers behind the American labor market.
The Labor Department said Wednesday that it won’t won’t release a full jobs report for October because it couldn’t calculate the unemployment rate during the government shutdown.
Instead, it will release some of the October jobs data—including the number of jobs that employers created last month—along with the full November jobs report on Dec. 16, a couple of weeks late.
—Paul Wiseman, AP economics writer
AP Economics Writer Christopher Rugaber contributed to this report.
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