The Bureau of Labor Statistics has released its September 2026 Report, and after August’s surprise jump, the labor market cooled back down. Payrolls barely moved, the unemployment rate ticked up, and August’s big headline number was revised lower. Still, manufacturing kept building, the unemployment rate stayed in a narrow range, and paychecks continued to grow.
Here’s what the latest data tells us about the labor market:
The great news is:
Manufacturing keeps building momentum: The sector added 9,000 jobs in September and is now up 72,000 since its recent low in December 2025. Plastics and rubber products manufacturing and machinery manufacturing each added 5,000 jobs. That is nine months of steady recovery in a sector that was shrinking at the end of last year.
Fewer people are on the sidelines: The number of people marginally attached to the labor force fell by 236,000 to 1.5 million. These are people who want a job, are available to work, and have looked in the past year. A drop this size suggests more of them are either back in the job search or already working.
Hospitals and outpatient care are still hiring: Even with healthcare slowing overall, ambulatory health care services added 13,000 jobs and hospitals added 12,000. Demand for clinical and patient-facing roles remains steady.
The good news is:
Unemployment is holding in a tight range: The unemployment rate was 4.2% in September, with 7.1 million people unemployed. Both changed little over the month, and the rate has stayed between 4.1% and 4.3% since March.
Participation edged up: The labor force participation rate rose to 61.8%, and the employment-population ratio ticked up to 59.2%. Both measures have shown little net change since January, a steadier picture than last month suggested.
Construction is steady: The industry added 11,000 jobs, right in line with its average of 10,000 per month over the past year. Nonresidential specialty trade contractors continued to trend up, adding 12,000 jobs.
Wages continue to rise: Average hourly earnings increased by $0.05 to $37.81, up 3.0% year over year. Production and nonsupervisory workers saw a slightly bigger bump, with earnings up $0.07 to $32.60.
Hours are stable: The average workweek held at 34.4 hours. In manufacturing, the workweek stayed at 40.6 hours with 3.0 hours of overtime, a sign employers are keeping production schedules intact.
The bad news is:
Hiring stalled: Total nonfarm payrolls rose by just 29,000 in September, below the average monthly gain of 45,000 over the prior 12 months. Employment in every major industry changed little over the month.
The summer was revised down: July was revised from +21,000 to a loss of 10,000, and August was revised from +162,000 to +133,000. Combined, employment in July and August is 60,000 lower than previously reported, which takes some of the shine off last month’s rebound.
Insurance carriers keep shedding jobs: Financial activities lost 7,000 jobs in September and is down 129,000 since its recent peak in May 2025. Most of that decline, 90,000 jobs, came from insurance carriers and related activities.
Healthcare is slowing: Health care added 17,000 jobs, about half its average monthly gain of 33,000 over the prior year. Nursing and residential care facilities lost 9,000 jobs, offsetting part of the gains in hospitals and outpatient care.
Wage growth is cooling: Year-over-year earnings growth slipped to 3.0%, down from 3.1% in August and 3.5% earlier this summer. Raises are still happening, but they are getting smaller.
Long-term unemployment is stuck: The number of people jobless for 27 weeks or more held at 1.9 million, or 27.1% of all unemployed people. Workers who lose a job are still taking a long time to land the next one.
Involuntary part-time work isn’t improving: The number of people working part time for economic reasons was essentially unchanged at 4.5 million. After August’s big drop, these workers are still waiting on full-time hours.
The restaurant rebound didn’t last: After food services and drinking places drove August’s gains, leisure and hospitality showed little change in September. The same was true for retail trade, transportation and warehousing, professional and business services, and government.
Final Takeaway
The September 2026 jobs report confirms that August was more of a bump than a turning point. Payroll growth slowed to 29,000, the summer was revised lower, and no major industry posted meaningful gains. Manufacturing and construction held steady, unemployment stayed in its narrow range, and fewer people are sitting on the sidelines.
The underlying picture remains uneven. Wage growth keeps easing, healthcare hiring is running at half its usual pace, insurance carriers continue to cut jobs, and long-term unemployment isn’t budging.
For employers, a quiet month is not a reason to wait. When hiring is slow across the board, every hire carries more weight, and the companies that come out ahead are the ones with a clear process for finding the right candidates quickly and keeping the great people they already have. The best time to sharpen your hiring strategy is before the market forces you to.