U.S. employers added 29,000 jobs in September and the unemployment rate edged up to 4.2 per cent, the Bureau of Labor Statistics said in its Employment Situation release on Oct. 2, 2026.
The gain was well below the roughly 90,000 forecasters expected, according to SHRM, and downward revisions erased another 60,000 jobs from July and August. Canada, by contrast, lost 68,000 jobs in September as its unemployment rate rose to 6.5 per cent, Statistics Canada said on Oct. 9.
The U.S. agency said July employment was revised from a gain of 21,000 to a loss of 10,000. August was cut from a gain of 162,000 to 133,000. The bureau described September payroll growth as having “changed little.”
Health care added 17,000 jobs, construction 11,000 and manufacturing 9,000, the bureau said. Financial activities lost 7,000. SHRM reported that government shed 17,000 jobs, information lost 10,000 and professional and business services lost 9,000. Temporary help services fell by 10,900 after eight straight months of growth, SHRM said.
Average hourly earnings rose five cents, or 0.1 per cent, to $37.81, the bureau said. Over the past 12 months, earnings are up 3 per cent. SHRM reported that is the slowest annual pace since May 2021.
The unemployment rate has stayed between 4.1 per cent and 4.3 per cent since March, SHRM reported. The labour force grew by 485,000 in September and the participation rate rose to 61.8 per cent, which helps explain why a small payroll gain did not push unemployment higher by more than one-tenth of a point.
Julius Probst, a senior economist at Appcast, called the report disappointing and said the six-month average of job growth has fallen to 65,000, according to SHRM. Daniel Zhao, chief economist at Glassdoor, said the labour market is still struggling to accelerate into steady, faster growth, SHRM reported.
The weak numbers land after the U.S. Federal Reserve raised its target for the federal funds rate by a quarter of a percentage point to 3.75 to 4 per cent on Sept. 16. The Federal Open Market Committee voted 12-0 for the increase. In its statement, the committee said “Job gains have kept pace with the workforce, and the unemployment rate has changed little” and that “Inflation remains elevated.” It added that the action “will support a timelier return to the Committee’s 2 per cent goal.”
Nicole Bachaud, a labour economist at ZipRecruiter, said higher borrowing costs are dampening hiring and expansion plans, SHRM reported.
For Canadians, the two reports point in the same direction from different starting points. Statistics Canada said the economy shed jobs for a second straight month, and the U.S. is Canada’s largest trading partner. Canada News Media reported the Canadian figures on Oct. 9, including losses of 48,000 jobs among workers aged 15 to 24.
Trade tensions are part of that backdrop. CNBC reported on Aug. 22 that U.S.-Canada trade talks had collapsed and that Prime Minister Mark Carney said retaliatory tariffs would start Sept. 8. This article does not establish how much of either country’s labour market weakness is linked to tariffs, and neither agency’s release makes that attribution.
The next U.S. Employment Situation report, covering October, is scheduled by the Bureau of Labor Statistics. The Federal Reserve’s next policy decision will show whether officials weigh the slowing job market against inflation they have called elevated.
Via SHRM, with figures from the Bureau of Labor Statistics and the Federal Reserve.
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