U.S. Employment (September 2025)

Delayed jobs report beats expectations on hiring, but unemployment rate ticks up to 4.4% 

• Non-farm employment increased by 119k in September, ahead of Bloomberg's consensus forecast of 54k. Job gains for the prior two months were revised lower by a total of 33k.
  
  • Over the past three months, non-farm payrolls averaged 62k jobs, below the twelve-month average of 109k.
• Private payrolls rose 97k – up from 18k reported in August – with nearly all the gains concentrated in health care & social assistance (+57k) and leisure & hospitality (+47k). Meanwhile, transportation & warehousing (-25k), professional & business services (-20k), manufacturing (-6k) and mining & logging (-3k) all shed jobs. Federal hiring (-3k) was also lower on the month, though this was more than offset by a decent gain in state & local (+25k) hiring.
• In the household survey, the labor force (+470k) shot higher, eclipsing a smaller gain in civilian employment (+251k), pushing the unemployment rate up 0.12 percentage points to a new cyclical high of 4.4%. The labor force participation rate ticked up to 62.4% (from 62.3%). 
• Average hourly earnings (AHE) rose 0.3% month-on-month (m/m) – a tick slower than in August. On a twelve-month basis, AHE held steady at 3.8%.

Key Implications

• Non-farm payrolls surprised to the upside in September, with private sector hiring rising at its fastest clip in five months. However, jobs gains remain narrowly concentrated, and there's mounting evidence to suggest that trade exposed sectors like manufacturing and transportation & warehousing are increasingly feeling the pain from higher tariffs.  
• Given the slate of alternative private sector labor market data released since September, this morning's employment report was dated even before its release. Unfortunately, it will be another month before the next employment report, as the Bureau of Labor Statistics announced yesterday that it won't be releasing the October report and the release of the November figures has been delayed until December 16th. This will come after the FOMC's next meeting on December 10th, which almost guarantees that the Fed will skip its next meeting to better assess the backflow of economic data.

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