Payrolls rose by an estimated 29,000 in September, a change too small for the survey to tell from none

What happened

Payroll employment rose by an estimated 29,000 in September and the unemployment rate was 4.2 percent, the Bureau of Labor Statistics reported on Friday, October 2, 2026.¹ The bureau said both “changed little.”¹

• Payroll employment rose by an estimated 29,000 in September and the unemployment rate was 4.2 percent, the Bureau of Labor Statistics reported on Friday, October 2, 2026.¹

Private payrolls rose by 46,000¹ while government payrolls fell by 17,000,¹ 10,600 of them in local government outside education.¹

• Private payrolls rose by 46,000¹ while government payrolls fell by 17,000,¹ 10,600 of them in local government outside education.¹

Kevin Hassett, the director of the National Economic Council,²⁹ argued on October 2 that federal job cuts make the total look weaker than private hiring,²⁸ which he said “is still booming.”²⁸ Federal cuts do not account for September’s number. Federal payrolls are down about 327,000 since December 2024,¹⁵ but only about 1,000 of that came in September¹⁵ from the August level.¹⁵ Hassett also said that half of job creation “over the last two years under Joe Biden,”²⁸ was federal hiring,²⁸ without naming the months. From January 2023¹⁵ to January 2025,¹⁵ federal jobs were about 4 percent of the payroll gain on the government’s own series.¹⁴

• Kevin Hassett, the director of the National Economic Council,²⁹ argued on October 2 that federal job cuts make the total look weaker than private hiring,²⁸ which he said “is still booming.”²⁸ Federal cuts do not account for September’s number. Federal payrolls are down about 327,000 since December 2024,¹⁵ but only about 1,000 of that came in September¹⁵ from the August level.¹⁵
• Hassett also said that half of job creation “over the last two years under Joe Biden,”²⁸ was federal hiring,²⁸ without naming the months. From January 2023¹⁵ to January 2025,¹⁵ federal jobs were about 4 percent of the payroll gain on the government’s own series.¹⁴

The bureau also revised July and August down by 60,000 combined: August from a gain of 162,000 to 133,000, and July from a gain of 21,000 to a loss of 10,000.¹

• The bureau also revised July and August down by 60,000 combined: August from a gain of 162,000 to 133,000, and July from a gain of 21,000 to a loss of 10,000.¹

The payroll figure counts jobs on employer payrolls, and the unemployment rate counts people. The two counts come from different surveys, so they can move differently in one month.¹

• The payroll figure counts jobs on employer payrolls, and the unemployment rate counts people. The two counts come from different surveys, so they can move differently in one month.¹

The Federal Reserve weighs reports like this one against two goals, maximum employment and price stability.⁶ It defines price stability as inflation at 2 percent⁶ and judges maximum employment from a wide range of indicators.⁶ On September 16 its Federal Open Market Committee voted 12 to 0⁵ to raise the target range for the federal funds rate by 1/4 percentage point, to 3-3/4 to 4 percent,⁵ saying inflation “remains elevated.”⁵ Chris Phelan, chair of the President's Council of Economic Advisers,³⁰ called the increase a mistake because inflation is already coming down.³⁰ Philip N. Jefferson, a vice chair of the Federal Reserve Board, defended it on October 1,¹² saying he sees economic activity and labor market conditions “remaining broadly solid while inflation remains above our target.”¹² The committee meets next on October 27-28.⁹

• The Federal Reserve weighs reports like this one against two goals, maximum employment and price stability.⁶
• It defines price stability as inflation at 2 percent⁶ and judges maximum employment from a wide range of indicators.⁶
• On September 16 its Federal Open Market Committee voted 12 to 0⁵ to raise the target range for the federal funds rate by 1/4 percentage point, to 3-3/4 to 4 percent,⁵ saying inflation “remains elevated.”⁵ Chris Phelan, chair of the President's Council of Economic Advisers,³⁰ called the increase a mistake because inflation is already coming down.³⁰
• Philip N. Jefferson, a vice chair of the Federal Reserve Board, defended it on October 1,¹² saying he sees economic activity and labor market conditions “remaining broadly solid while inflation remains above our target.”¹² The committee meets next on October 27-28.⁹

After the report, financial markets first cut their bets on a rate increase at that meeting to 13 percent, then lifted them to about 23 percent, little changed from Thursday.²⁷ One account had the slowdown “almost taking another interest rate hike from the Federal Reserve this month off the table.”²⁷

• After the report, financial markets first cut their bets on a rate increase at that meeting to 13 percent, then lifted them to about 23 percent, little changed from Thursday.²⁷

Inflation in August was 3.4 percent,⁷ measured by the annual change in the personal consumption expenditures price index, the gauge behind the Fed's 2 percent goal.⁶ Average hourly earnings were up 3.0 percent over the past 12 months.¹ The next employment report, for October, is scheduled for November 6.¹

• Inflation in August was 3.4 percent,⁷ measured by the annual change in the personal consumption expenditures price index, the gauge behind the Fed's 2 percent goal.⁶
• Average hourly earnings were up 3.0 percent over the past 12 months.¹
• The next employment report, for October, is scheduled for November 6.¹

The Catch

USA Today headlined its story “September jobs report shows slowdown in hiring, unemployment ticks up”.³⁵ The 29,000 is a net change in payroll jobs, not a count of hires, and it is under the roughly 122,000 the bureau counts as a statistically significant monthly change.¹

• USA Today headlined its story “September jobs report shows slowdown in hiring, unemployment ticks up”.³⁵
• The 29,000 is a net change in payroll jobs, not a count of hires, and it is under the roughly 122,000 the bureau counts as a statistically significant monthly change.¹

The rounded unemployment rate did rise, from 4.1 to 4.2.¹ But the bureau said payrolls and the rate both “changed little,” its words for a change the surveys cannot distinguish from none.¹

• The rounded unemployment rate did rise, from 4.1 to 4.2.¹
• But the bureau said payrolls and the rate both “changed little,” its words for a change the surveys cannot distinguish from none.¹

In the household survey, employment rose by 406,000, under the 650,000 that survey needs before a change is statistically significant.¹ The labor force, the employed plus the unemployed, rose by 485,000.¹ Because the labor force grew by more than employment did, the number of unemployed rose by 78,000, and the rate, which is the unemployed as a percent of the labor force, went from 4.1 to 4.2 percent.¹

• In the household survey, employment rose by 406,000, under the 650,000 that survey needs before a change is statistically significant.¹
• The labor force, the employed plus the unemployed, rose by 485,000.¹
• Because the labor force grew by more than employment did, the number of unemployed rose by 78,000, and the rate, which is the unemployed as a percent of the labor force, went from 4.1 to 4.2 percent.¹

Unrounded, the rise is about 0.03 point. A St. Louis Fed note dated October 2²² says, “More precise data show the rate increased slightly from 4.141% to 4.175%.”²²

One group's rate moved much more. The unemployment rate for Black workers rose from 6.0 percent in August to 7.0 percent in September,¹ while the overall rate moved by a tenth.¹ A year earlier it was 7.6 percent.¹

• One group's rate moved much more. The unemployment rate for Black workers rose from 6.0 percent in August to 7.0 percent in September,¹ while the overall rate moved by a tenth.¹
• A year earlier it was 7.6 percent.¹

Where this sits

Through September, payrolls have grown by about 68,000 jobs a month in 2026,¹⁴³³ against about 9,700 a month in 2025,¹⁴³³ counted from December 2024.¹⁴

• Through September, payrolls have grown by about 68,000 jobs a month in 2026,¹⁴³³ against about 9,700 a month in 2025,¹⁴³³ counted from December 2024.¹⁴

September's 29,000 is below the average monthly gain of 45,000 over the prior 12 months,¹ and below the roughly 90,000 economists surveyed had expected.²⁶ The unemployment rate, at 4.2 percent, has stayed between 4.1 percent and 4.3 percent since March.¹

• September's 29,000 is below the average monthly gain of 45,000 over the prior 12 months,¹ and below the roughly 90,000 economists surveyed had expected.²⁶
• The unemployment rate, at 4.2 percent, has stayed between 4.1 percent and 4.3 percent since March.¹

A gain that small can still hold unemployment steady when the labor force is barely growing. Break-even is the monthly job gain that holds the unemployment rate steady as the potential labor force grows.¹⁰ A Federal Reserve note estimates it fell from about 155,000 a month in 2023-24 to about 85,000 in 2025 as net immigration slowed,¹⁰ and says it could be under 10,000 a month in 2026 as that slowing continues.¹⁰ The note says its break-even estimates are “inherently subject to significant uncertainty.”¹⁰ Researchers at the Federal Reserve Bank of Dallas cite estimates that net unauthorized immigration “plummeted after early 2024”²³ and turned negative in February 2025, when more people left than arrived.²³ A low break-even does not make weak hiring healthy, in the view of Christopher J. Waller, a governor of the Federal Reserve Board. He said on February 23 that “close to zero net job creation over 2025 indicates a weak, and fragile job market.”¹¹

• A gain that small can still hold unemployment steady when the labor force is barely growing. Break-even is the monthly job gain that holds the unemployment rate steady as the potential labor force grows.¹⁰
• A Federal Reserve note estimates it fell from about 155,000 a month in 2023-24 to about 85,000 in 2025 as net immigration slowed,¹⁰ and says it could be under 10,000 a month in 2026 as that slowing continues.¹⁰
• The note says its break-even estimates are “inherently subject to significant uncertainty.”¹⁰ Researchers at the Federal Reserve Bank of Dallas cite estimates that net unauthorized immigration “plummeted after early 2024”²³ and turned negative in February 2025, when more people left than arrived.²³

What we do not know yet

The payroll figures for August and September are preliminary, based on incomplete returns from the employers surveyed.¹ The release gives no cause for the 29,000, though economists pointed to the calendar: payrolls “have a tendency to underperform when the Labor Day holiday falls relatively late in September, as was the case this year.”²⁷

• The payroll figures for August and September are preliminary, based on incomplete returns from the employers surveyed.¹

Hires, which count all additions to the payroll rather than the net change,⁸¹ come from a separate survey. In August they changed little, at 5.2 million,⁸ and September's count comes out November 3.⁸ Hiring has run at a low rate for more than two years:³³ the hires rate was 3.3 percent in August 2026¹³ and in August 2024,¹³ against 4.2 percent in August 2022.¹³

• Hires, which count all additions to the payroll rather than the net change,⁸¹ come from a separate survey. In August they changed little, at 5.2 million,⁸ and September's count comes out November 3.⁸
• Hiring has run at a low rate for more than two years:³³ the hires rate was 3.3 percent in August 2026¹³ and in August 2024,¹³ against 4.2 percent in August 2022.¹³

Chronology

The records

Since the previous story

Read the previous story

July and August combined, revised lower: first tracked in this story. With these revisions, employment in July and August combined is 60,000 lower than previously reported.

Dow Jones survey of job growth: first tracked in this story. Economists surveyed by Dow Jones had been looking for job growth of 84,000 and an unemployment rate of 4.1%.

Reuters survey of job growth: first tracked in this story. Nonfarm payrolls likely increased by 90,000 last month after surging by 162,000 in August, a Reuters survey of economists predicted.

Payrolls added in September: first tracked in this story. Total nonfarm payroll employment changed little in September (+29,000), following an average monthly gain of 45,000 over the prior 12 months.

Unemployment rate: first tracked in this story. Both the unemployment rate, at 4.2 percent, and the number of unemployed people, at 7.1 million, changed little in September.

Hourly earnings over the past year: first tracked in this story. Over the past 12 months, average hourly earnings have increased by 3.0 percent.

Average monthly gain over the prior 12 months: first tracked in this story. Total nonfarm payroll employment changed little in September (+29,000), following an average monthly gain of 45,000 over the prior 12 months.

Sources

• Reuters · October 2, 2026 · U.S. job growth expected to slow in September
• Bureau of Labor Statistics · October 2, 2026 · The Employment Situation, September 2026
• CNBC · October 2, 2026 · Labor market faltered in September