US labor market slows as unemployment rises to 4.2%

The United States labor market showed signs of slowing in September, with only 29,000 new jobs added. According to federal reports, the unemployment rate rose to 4.2 percent. Data from the Bureau of Labor Statistics also indicated that employment gains for July and August were revised downward by a combined 60,000 jobs. Additionally, the unemployment rate for Black workers rose to 7 percent, up from August.

Despite the modest job creation, an ADP Research report suggests that the manufacturing sector may be stronger than headline figures indicate. ADP Chief Economist Nela Richardson noted that manufacturers often utilize overtime before committing to permanent new hires. In September, average weekly hours in manufacturing rose to 45.6 hours, a 1.7 percent increase from the previous year. This shift has led to gross pay growth in the sector accelerating to 5.5 percent, as workers earn more through increased hours rather than base pay increases.