U.S. job growth slows to 29,000 in September as unemployment rises

“This stability has helped keep consumers spending, but with wages trailing inflation since April … that means fewer chances to move to a better-paying job,” Friel said.

Private-sector data looked firmer. The ADP National Employment Report showed 90,000 jobs added in September, as HRD America covered in its look at September’s hiring rebound and its warning on retention. The BLS count of 29,000 covers a broader set of employers.

“The September jobs report fell short of the hiring surge many expected … While September is typically a period of increased hiring as businesses ramp up for the final months of the year, weaker-than-expected job growth suggests employers are still approaching hiring with caution amid broader economic uncertainty,” said Deborah Saneman, CEO of Würk, a workforce management software company in Denver.

Energy costs and interest rates weigh on hiring plans

Higher energy prices tied to the war with Iran have pushed up inflation. The Federal Reserve raised interest rates in September 2026 for the first time in three years, citing higher prices, and the 10-year Treasury yield, which underpins many business loans, reached a 24-year high. Mortgage rates also jumped to 7.28% on Thursday from 7% the week before, the highest level in three years and the largest weekly rise since 2022, The Guardian reported. Higher borrowing costs can slow business expansion and, with it, hiring.

When the Fed raised rates on Sept. 16, chair Kevin Warsh described the labor market as consistent with full employment, though he said inflation had been too high for too long. Jobless claims also inched lower for a fourth straight week, according to the Department of Labor, and the unemployment rate remains below the 4.5% it reached in November 2025.

Confidence is fragile too. The Conference Board, a business research group, said consumer confidence sank to its lowest level in more than a decade, according to The Associated Press.