September U.S. job growth slows to 29,000 as unemployment rises to 4.2%

The U.S. economy added just 29,000 jobs in September, far short of the 84,000 jobs economists had forecast, and the unemployment rate edged up to 4.2%, according to the Labor Department's latest report. Average hourly earnings rose 0.1% from the previous month and 3% from a year earlier, marking the sixth consecutive month that wage growth has lagged behind inflation.

Revisions to prior months' data reduced July's net job gain by 31,000 and August's by 29,000, the agency said in a statement. "The change in total nonfarm payroll employment for July was revised down by 31,000, from +21,000 to -10,000, and the change for August was revised down by 29,000, from +162,000 to +133,000," the Labor Department noted.

September's hiring was the third weakest of the year, after a loss of 156,000 jobs in February and a decline of 10,000 jobs in July. The healthcare sector contributed the most, adding 17,000 positions, though at a slower pace than its recent average. Construction employment rose by 11,000, and manufacturing added 9,000 jobs, while many other sectors showed little change.

Financial markets reacted to the weaker report; stocks initially rose on expectations that the Federal Reserve may hold off on further rate hikes, but gains were later trimmed. Treasury yields fell briefly before resuming their upward trend.

The September report is the final employment update before the upcoming midterm elections, providing policymakers and political leaders with fresh data on labor market conditions.