U.S. employers added surprisingly solid 119,000 jobs in September, government says in delayed report

U.S. employers added 119,000 jobs in September, more than doubling economists’ expectations of 50,000, according to a delayed government report finally released after a seven-week federal shutdown.

The Labor Department data, though arriving late due to the 43-day government closure that furloughed federal workers, provided welcome clarity for businesses, investors, and policymakers who had been operating without official employment statistics since the shutdown began.

Despite the headline figure appearing robust, troubling details emerged beneath the surface. Labor Department revisions showed the economy actually lost 4,000 jobs in August, contrary to the 22,000 gain initially reported. Combined revisions subtracted 33,000 positions from July and August figures. September marked the second monthly job loss this year, something not seen since the 2020 pandemic.

The gains in September were notably concentrated, with healthcare and social assistance (57,000 jobs) and leisure and hospitality (37,000 jobs) accounting for over 87% of new positions. Construction firms added 19,000 jobs and retailers nearly 14,000, but manufacturing continued its decline, shedding 6,000 positions for its fifth consecutive monthly drop.

“We’ve got these strong headline numbers, but when you look underneath that you’ll see that a lot of that is driven by healthcare,” said Cory Stahle, senior economist at the Indeed Hiring Lab. “At the end of the day, the question is: Can you support an economic expansion on the back of one industry? Anybody would have a hard time arguing everybody should become a nurse.”

The unemployment rate increased to 4.4% in September, its highest level since October 2021 and up from 4.3% in August. The uptick partially resulted from 470,000 people entering the labor market – either working or seeking work – not all of whom immediately found employment.

Average hourly wages rose 0.2% from August and 3.8% year-over-year, gradually approaching the 3.5% annual increase that Federal Reserve officials consider compatible with their inflation targets.

The September report arrives during significant economic uncertainty. The job market has been constrained by high interest rates and anxiety surrounding President-elect Donald Trump’s proposed tariffs on imports. The federal government itself lost 3,000 jobs, marking its eighth consecutive monthly decline, a trend that could accelerate under Trump’s administration, which has signaled plans for cost-cutting measures.

Labor Department revisions revealed that the economy created 911,000 fewer jobs than originally reported in the year ending March 2024. This reduced the monthly average job creation during that period from 147,000 to just 71,000. Since March, monthly job growth has fallen further to an average of 59,000.

The stronger-than-expected September figures may influence the Federal Reserve’s upcoming December meeting, making officials less likely to cut interest rates. According to minutes from their October meeting released Wednesday, many were already hesitant about reducing rates next month. Continued hiring suggests the economy might not require lower interest rates to maintain expansion.

Fed officials remain divided between those focused on controlling inflation through higher rates and those concerned that sluggish hiring requires support through rate reductions.

Looking ahead, the Labor Department announced it won’t release a complete October jobs report due to shutdown-related data collection issues. Instead, partial October employment data will be published alongside the full November jobs report on December 16, which is later than usual.

The 2024-2025 job market has featured an unusual combination of relatively weak hiring alongside few layoffs. This means employed Americans generally enjoy job security, while those seeking work often struggle to find positions.

Megan Fridenmaker, a 28-year-old former podcast network writer in Indianapolis who lost her job last month, exemplifies this challenge. Despite applying for over 200 positions, she has secured just one interview.

“I am far from the only unemployed person in my friend group,” she said. “Where the job market’s at right now – people will apply for hundreds and hundreds of jobs before getting one interview.”

She described a frustrating application process: “Out of everything I’ve applied for, I get a response from maybe a quarter of them. And the vast majority of the responses are automated – ‘Thank you so much, but we’ve gone with another candidate.’ ‘Thank you so much, but we’ve already filled the position.'”

“The whole job-hunting experience has felt so cold and so distant and so removed from who we are as humans,” Fridenmaker added.