US jobs grow by 29,000 as unemployment rises to 4.2%

The US economy added 29,000 jobs in September and the unemployment rate rose to 4.2 percent, the Bureau of Labor Statistics said on October 2, in a jobs report that showed weaker hiring than analysts expected.

Analysts polled by Dow Jones Newswires and the Wall Street Journal had expected the economy to add 84,000 jobs.

The BLS also revised July and August job figures down by a combined 60,000 jobs. The July revision showed the economy lost jobs that month instead of gaining 21,000 as previously reported.

Employment in most major sectors was largely unchanged. Health care added 17,000 jobs, below its average monthly gain of 33,000 over the past year. The financial sector lost 7,000 jobs in September, bringing its decline from a recent peak in May 2025 to 129,000.

Average hourly earnings rose 3.0 percent from a year earlier, according to the BLS. Ken Kim, senior economist at KPMG, said the wage data suggested households were falling behind inflation.

Democratic Senator Elizabeth Warren used the figures to criticise President Donald Trump's economic record. The report comes before November midterm elections, when Trump's Republican Party faces pressure over his handling of the economy.

The data follows the Federal Reserve's decision last month to raise interest rates to address high prices. Raising rates can cool inflation but can also limit economic activity and affect the job market.

Kathy Bostjancic, chief economist at Nationwide, said the jobs data supported Federal Reserve officials who see no need to rush into another rate increase at the October meeting. Nancy Vanden Houten at Oxford Economics said she expected inflation risks to remain the central bank's bigger concern and forecast another rate increase.