US Job Growth Cools Significantly as Unemployment Rises Ahead of Midterm Elections

Hiring in the United States slowed noticeably in September, falling well short of economists’ expectations as the unemployment rate ticked upward in the final jobs report before the consequential midterm elections. According to the Labor Department’s report released on Friday, the US economy added just 29,000 jobs, far below projections. Dow Jones had anticipated 84,000 jobs, while economists surveyed by Reuters expected 90,000 job additions. Meanwhile, the unemployment rate rose by 0.1 percentage point, moving from 4.1 percent to 4.2 percent.

Growth was primarily driven by the healthcare sector, which accounted for the majority of new positions by adding 17,000 jobs—marking a slowdown from an average of 33,000 jobs per month over the previous year. Construction added 11,000 jobs, and manufacturing contributed 9,000. Conversely, financial activities, including commercial banking and insurance, shed 7,000 jobs. Most other sectors, such as retail, oil and gas extraction, and leisure and hospitality, remained largely unchanged.

“Today’s disappointing report shows the labour market is grinding to a halt, marked by slow hiring and declining real wages that leave workers with very little leverage,” said Kyle Moore, chief economist at the think tank The Century Foundation, in remarks provided to Al Jazeera.

Previous employment figures also saw downward revisions. July's initial gain of 21,000 jobs was revised to a loss of 10,000 jobs, while August was revised downward by 29,000 jobs, shifting from 162,000 down to 133,000. Additionally, wages grew by 3 percent, representing the slowest annual wage increase in five years.

Friday’s report caps a week of softening economic data ahead of the crucial midterm election on November 3. An AP-NORC poll released on Thursday revealed that 61 percent of polled Americans believe the US economy is worse off now than when Trump took office in January 2025. Breyon Williams, chief economist for the economic policy think tank Groundwork Collaborative, stated, “When businesses are barely hiring and raises aren’t keeping up with rising prices, it’s a stalled economy – and working families are stuck in it.”

Amid these trends, Trump has sought to shift the narrative regarding the slumping economy, writing in a Truth Social post on Monday that “The United States has the BEST Employment Numbers in HISTORY.”

Earlier in the week, the US Labor Department released the Job Openings and Labor Turnover Survey, or JOLTS report, pointing to a low-hire, low-fire environment where workers largely stay put and employers maintain the status quo. Conversely, ADP’s private payroll report on Wednesday indicated 90,000 private-sector jobs were created, and data from Challenger, Gray & Christmas showed that layoffs dropped by 18 percent in September to over 43,000 cuts.

Looking ahead, Friday’s employment figures arrive just before the Federal Reserve’s final policy decision prior to the midterm election. During their October 27-28 meeting, central bank officials will decide whether to adjust interest rates. The CME FedWatch tool indicates a 77.3 percent probability that rates will remain steady in the 3.75-4.00 percent range, up from 35.8 percent the previous week.

Despite the slowing job growth, US markets trended upward in midday trading following the report. The tech-heavy Nasdaq rose 1.5 percent, the Dow Jones Industrial Average gained 0.6 percent, the S&P 500 increased 1.1 percent, and the price of gold climbed 1.1 percent to $4,223.49 amid economic uncertainty.