U.S. hiring stalls at 29,000, yet Dow, S&P 500 and Nasdaq surge: Why Wall Street welcomed September’s weak jobs report

September jobs report today: The US economy added only 29,000 nonfarm jobs in September, according to the Labor Department. Economists had expected a gain of about 90,000. The unemployment rate also moved up to 4.2% from 4.1%.

Payroll growth for July and August was cut by a combined 60,000 jobs. August's gain was revised to 133,000, while July was revised to a 10,000-job decline.

US jobs report: Why weak hiring is becoming harder to dismiss after July and August revisions

Hiring was not evenly spread across the economy. Healthcare added 17,000 jobs in September. That was still a sizeable share of total payroll growth, but it was well below the sector's average monthly gain of 33,000 over the past year.


Construction added another 11,000 positions. The sector has continued to benefit from activity tied to infrastructure and data-center development.

Financial Jobs

Financial activities lost 7,000 jobs in September. The decline extends a longer slide. Employment in the sector is now 129,000 positions below its May 2025 peak. Insurance carriers have accounted for much of the decline.

The financial sector's performance offers a different view of the labor market from healthcare and construction. Some industries are still expanding their payrolls, while parts of the white-collar economy have been pulling back.

Manufacturing, by comparison, added 9,000 jobs. Overall private payrolls increased by 46,000.

The uneven distribution of those gains is one of the more useful details in the September report. The US is still creating jobs, but the sources of that growth are becoming narrower.

Low-Hire, Low-Fire

The labor market is not showing the classic signs of a sharp employment downturn.

Companies have not moved into widespread layoffs. At the same time, they have become much more cautious about adding new workers. That combination has produced what economists describe as a “low-hire, low-fire” labor market.

The unemployment rate remains relatively low at 4.2%. Yet that figure does not capture how difficult a slow-hiring environment can be for people looking for a new job.

Wage growth has also cooled. Average hourly earnings rose just 0.1% from August and were 3% higher than a year earlier.

The Jobs Data Put Another Decision in Front of the Fed

The September report adds another complication for Federal Reserve policymakers. Higher interest rates are intended to slow demand and reduce inflationary pressure. A weaker hiring environment is one of the channels through which tighter monetary policy can affect the economy.

The difficulty is that policymakers also have to judge how much slowing is enough.

The latest employment figures give the Fed evidence of softer labor demand, particularly when the September number is viewed alongside the downward revisions. At the same time, the unemployment rate remains relatively low, and the report does not show widespread job losses.

US stock market today: Why the Dow, S&P 500 and Nasdaq rose after the weak jobs report

US stocks moved higher after the employment figures. The Dow Jones Industrial Average rose 324.09 points, or 0.64%, to 51,250.65. The S&P 500 gained 0.90% to 7,735.08, while the Nasdaq climbed 1.39% to 27,244.33.

Treasury yields also moved lower. The 10-year yield fell to 5.208%, while the two-year yield declined to 4.758%.

The market response reflects the unusual nature of the report. Weak employment data can be negative for the economic outlook, yet investors can also view slower hiring as evidence that interest-rate pressure may ease.