US September jobs report expected to show modest hiring and slowing wage growth

The Labor Department is slated to release its September employment report at 8:30 a.m. ET, with forecasts pointing to the addition of roughly 94,000 jobs and an unemployment rate holding at 4.1% for a third consecutive month. Average hourly earnings are expected to rise 0.3% in the month, nudging the annual wage growth rate to about 3.2%, still below the current 3.4% inflation rate.

Economists note that consumer spending remains resilient despite five years of elevated prices, supported by wealth gains, post-pandemic savings and a stable labor market. However, they warn that paychecks are losing purchasing power as inflation outpaces wage growth.

"Having a job enables confidence to keep spending despite inflation headwinds," said Kathy Bostjancic, chief economist at Nationwide.

"The rebound in inflation is coming at an unfortunate time, because it’s being married with a slowdown in wage growth as the labor market cools," said Daniel Zhao, chief economist at Glassdoor.

"Wage growth is moving in the wrong direction as inflation is also moving in the wrong direction," Zhao added.

The report is expected to show a slowdown from August’s 162,000 jobs added, reflecting a broader shift in the labor market driven by an aging population, higher retirements and reduced net immigration. While the overall hiring picture remains solid, the data may reveal variability caused by seasonal adjustments, extreme weather and other short-term factors.

Bank of America economists highlighted that August’s job gains were spread across a wide range of sectors, including construction, professional services and logistics, and suggested similar breadth could appear in September. Private-sector hiring estimates from ADP indicate about 90,000 jobs added, aligning with the official forecast.

Layoff activity remains low; Challenger, Gray & Christmas reported 43,281 planned layoffs in September, an 18% decline from August. Yet analysts caution that higher interest rates and the adoption of artificial-intelligence technologies could increase future job losses.

"Companies are in a wait-and-see period right now," said Andy Challenger, chief revenue officer at the outplacement firm.

Researchers at the Kansas City Fed described the labor market as "calm but fragile," noting that low unemployment driven primarily by low job loss rather than high job finding could mask underlying vulnerabilities.

The report may also begin to reflect the impact of the Trump administration’s suspension of Temporary Protected Status for Haitian immigrants, a group that previously accounted for an estimated 200,000 workers in sectors such as healthcare and retail.

"We’ve seen a lot of this breath-holding, walking on eggshells, stagnation taking place across the market," said Nicole Bachaud, labor economist at ZipRecruiter.

Overall, the September jobs data will provide a key gauge of whether the U.S. labor market can sustain its current pace of hiring amid rising inflation, higher borrowing costs and evolving demographic trends.