Underwhelming Job Report Gives Trump Midterm Headwind - Newsweek

The job market weakened significantly in September, as new Labor Department data came in well below expectations, suggesting that the celebrated hiring surge reported the previous month was short-lived.

The U.S. economy added 29,000 jobs in September, according to the Employment Situation Summary for September, published on Friday morning by the Bureau of Labor Statistics (BLS). That is less than a third of the 90,000 analysts had penciled in, though predictions ranged from 180,000 to 35,000.

It also marks a steep drop compared to 133,000 in August, which was revised down from an originally reported 162,000.

July's total was also revised down by 31,000, from 21,000 jobs to a negative -10,000, meaning hiring across the previous two months was 60,000 weaker than originally believed.

Meanwhile, the unemployment rate inched up to 4.2 percent from 4.1 percent. This compares with 4 percent when President Donald Trump returned to office and a recent peak of 4.5 percent in November.

Alongside inflation readings, the BLS employment report is among the most closely watched gauges of economic conditions in the U.S.—with outsized increases or declines taken by some as a signal of progress or an endorsement of the administration’s domestic agenda.

Last month’s report had nonfarm payrolls nearly triple consensus forecasts, and was held up by the White House as a major victory for the president’s economic stewardship.

“Great jobs number just announced, breaking all estimates (except mine!) by double and triple - And you haven’t seen anything yet!” the president posted on Truth Social.

And as the last employment report before the midterm elections, Democratic campaigns may also draw on the weak reading as evidence that the economy, under the current administration, is faltering.

“This is the final jobs report before the midterms and it is not the result they would want,” Tahra Hoops, director of economic analysis at the technology trade group Chamber of Progress, posted to X.

“It’s not *terrible* but for a so called ‘booming’ economy, these numbers aren’t it,” she added.

In the year so far, nonfarm payrolls have averaged 68,000 per month, owing to a few stronger-than-expected reports over spring. This compares to an average gain of roughly 25,000 in the first nine months of 2025 and about 117,000 the year prior.

The BLS said wage growth over the past 12 months was 3 percent in September. This is slower than the current annual inflation rate (3.4 percent), which the economist Heather Long notes means Americans’ wage gains have been “wiped out entirely.”

“Today’s report points to greater caution among employers,” Ger Doyle, regional president for North America at ManpowerGroup, said in a note shared with Newsweek.

“Even in a softer market, demand persists for selected skills and capabilities, creating a growing distinction between roles tied to strategic priorities and those dependent on broader workforce expansion,” he added.

The BLS said that employment across the major sectors “changed little over the month,” but the report revealed some notable shifts.

Health care employment—a consistent bright spot for the U.S. labor market—rose 17,000 in September, but the agency notes that this was “a slower pace” than the average monthly gain of 33,000 over the past 12 months.

Construction and manufacturing rose 11,000 and 9,000, respectively, while financial activities employment declined by 7,000. The sector has seen 129,000 roles lost since its recent peak last May, and the BLS said most of these (-90,000) have been in “insurance carriers and related activities.”

Adam Schickling, senior economist at Vanguard said the report was further proof that the labor market “remains resilient, but it is not accelerating.”

“The labor market has not deteriorated sharply, but there is also little evidence that it has meaningfully strengthened,” he wrote in a note on Friday.

Schickling added that the report “strengthens the case for the Federal Reserve to remain patient.

The central bank increased rates for the first time since 2023 in mid-September to the dismay of the administration, and the odds that it will keep the current target range steady later this month have inched up slightly following Friday’s report, according to the CME Fedwatch tool. One week ago, markets were anticipating another hike at 64 percent odds.