In the final monthly employment update ahead of November’s congressional midterm elections, the U.S. labor market delivered a far weaker performance than expected in September, new federal data shows, pointing to a noticeable cooling of the world’s largest economy and shifting expectations for future Federal Reserve monetary policy.
Figures published by the U.S. Bureau of Labor Statistics (BLS) reveal that U.S. employers added just 29,000 net new jobs to their payrolls in September, a dramatic downturn from August’s revised 133,000 job gains. The slowdown cut across nearly all major sectors of the economy, from big tech to retail, where headcounts stayed largely flat as businesses opted to freeze hiring rather than expand or cut their workforces. The national unemployment rate also ticked upward slightly over the month, rising from 3.5% in August 3.8% in September.
The surprisingly soft jobs report has led economic analysts to downgrade their expectations for aggressive interest rate increases from the Federal Reserve, which has been raising borrowing costs for more than a year to curb persistent inflation. A cooling labor market eases upward pressure on wages, which central bank policymakers see as a key factor in bringing inflation back to their long-term 2% target. Many economists have noted that the weak September reading does not necessarily signal an impending deep recession, however.
George Brown, senior economist at asset management firm Schroders, pointed out that monthly job growth has been highly volatile throughout 2024, describing the trend as a “rollercoaster.” A single soft month of gains, he argued, is not enough to confirm a lasting, widespread collapse in employment. Bradley Saunders, North America economist at Capital Economics, echoed that tempered assessment, calling the lower-than-expected jobs figure “not disastrous.” He noted that the headline number was dragged down by one-off factors including a drop in temporary government positions and recent policy shifts affecting work visas that temporarily slowed hiring for foreign workers.
Beyond economic implications, the BLS data creates a major political challenge for former President Donald Trump and Republican candidates across the country, just four weeks before voters head to the polls for the 2026 midterm elections. This development stands in stark contradiction to Trump’s repeated public claims that the U.S. economy is booming, and that the country holds the title of the “hottest” economy in the world.
New public opinion polling underscores the growing gap between Trump’s upbeat economic messaging and public sentiment. A new AP-NORC poll released Thursday shows that only 17% of U.S. adults approve of Trump’s handling of cost-of-living issues, while just 26% approve of his overall management of the economy. Both approval marks hit new lows for Trump, falling below the lowest economic approval ratings recorded during President Joe Biden’s term in office.
Trump has privately and publicly acknowledged that his framing of the economy does not align with most Americans’ experiences. Earlier this week, he admitted during a White House event: “I’ve done a very bad job of explaining how good the country is doing.” The disconnect between the administration’s optimistic rhetoric and on-the-ground economic data leaves Republicans scrambling to defend their economic record on the campaign trail as voters prioritize inflation and jobs ahead of the critical midterm contests.