The latest U.S. non-farm payroll figures have delivered a significant downside surprise, with employers adding just 29,000 jobs in September 2026, well below economists’ expectations.
The unemployment rate also edged higher to 4.2%, while payroll growth for July and August 2026 was revised down by a combined 60,000 jobs.
Wage growth provided another important signal, with average hourly earnings rising just 0.1% in September 2026 and 3.0% over the past year.
Construction added 11,000 jobs and manufacturing 9,000, while healthcare continued to record employment gains.
Federal Reserve Decision?
For the Federal Reserve, the report strengthens the case for caution on further interest-rate increases.
The Fed raised its benchmark rate by 25 basis points in September 2026 to a 3.75%-4.00% range, but policymakers have continued to face a difficult balance between controlling inflation and maintaining maximum employment.
The weak payroll number, higher unemployment and softer wage growth reduce evidence of an overheating labour market.
Market expectations for another U.S. rate increase at the Fed’s October meeting fell sharply following the release, although U.S. inflation remains the key obstacle to any immediate easing in policy.
The report therefore leaves the Fed with a more delicate policy trade-off: employment is losing momentum, but inflation remains too important to ignore.