U.S. employers added 29,000 jobs in September, bringing total nonfarm payrolls to a record 159.04 million, according to a report published by Wolf Richter for WOLF STREET based on Bureau of Labor Statistics data. Private companies hired 46,000 workers while government agencies at all levels cut 17,000 positions, mostly at the local level. The labor force expanded by 485,000 people, marking the second consecutive monthly increase after eight months of sharp declines tied to immigration enforcement and boomer retirements.
The six-month average for total job gains stood at 66,000, down from August's figure, which had been the strongest since June 2024. Private-sector employment reached a record 135.72 million, with the six-month average climbing to 67,000 jobs—also a decline from August's 93,000, the highest level since mid-2024. Revisions swung in both directions: September's report revised August down by 29,000 jobs and July down by 31,000, while the previous month's report had revised July up by 44,000 and June up by 11,000. Among private industries, healthcare led with 23,000 new positions, followed by construction with 11,000 and leisure and hospitality with 10,000. Financial activities dropped 7,000 jobs, information lost 10,000, and professional and business services shed 9,000. Average hourly earnings rose 0.13% month-over-month to $37.81, up 3.0% year-over-year—lagging slightly behind the 3.4% August CPI inflation rate after exceeding inflation for three years through March 2026.
The report notes that job growth continues even though the labor force has declined by roughly 2 million people from its 2025 peak due to the crackdown on illegal immigration and the ongoing wave of boomer retirements. The federal government has eliminated 328,000 positions since January 2025 as the Trump administration was "cleaning house," while state governments cut 53,000 jobs as large public university systems faced declining enrollment, including among high-paying foreign students. The three-month average for labor force growth increased by 301,000 in September from August—the first rise this year—after dropping 2.07 million over the prior eight months. The unemployment rate ticked up to 4.18% from 4.14%, still a historically low figure within a 50-year timeframe, reflecting 7.11 million unemployed people actively seeking work divided by the 170.3 million labor force.
The decline in labor supply has fundamentally altered labor market dynamics, the report explains, contributing to the low unemployment rate despite modest job creation. The prime-age labor force participation rate—which tracks workers between 25 and 54 years old and eliminates the distortion from retiring boomers—rose to 83.7% in September, the highest since May and within a range not seen in over 20 years. The three-month average climbed to 83.5%. When people retire and stop seeking employment, they exit the labor force but remain in the population count until death, which is why the surge in boomer retirements over the past 15 years has depressed the overall labor force participation rate while leaving the prime-age rate unaffected. With fewer workers available and steady demand, employers face tighter labor markets that keep unemployment low even when hiring slows.