US hiring slumps to 29,000 in September as jobless rates climbs to 4.2%

Hiring in the US economy fell sharply in September, adding only 29,000 non-farm jobs, far below the forecast of 90,000, according to Bureau of Labour Statistics data reported Friday. Unemployment increased slightly to 4.2% from 4.1%, which partially reflects an increasing number of workers in the workforce.

What's worse, revisions showed a reduction in job creation in July and August by 60,000, showing a loss of 10,000 jobs in July and a 133,000 addition in August. On average, during the year, payroll additions have averaged 45,000 per month.

Job creation decreased in most sectors. While the sector of healthcare has been the best performer during the year, it created just 17,000 jobs compared to its average monthly addition of 33,000 jobs. Moreover, financial activities lost 7,000 jobs. Wages also were not impressive; average hourly earnings increased by 0.1% month-on-month and 3% year-on-year, the slowest pace since May 2021.

This has led to traders reducing the likelihood of a Fed interest-rate hike in October to roughly 20-23%. Bond yields decreased while stock futures rose.

However, other factors point to economic strength. Unemployment claims have remained low at their lowest point in almost 57 years, and layoffs have dropped by 20% compared to the same period last year. Nevertheless, the outlook on hiring has been weak, and even the typical jump in employment that happens each September due to seasonal demand in retail did not materialise.